EU plans €35 billion loan for Ukraine backed by Russian assets
European Commission President Ursula von der Leyen has announced plans for a €35 billion ($39.1 billion) loan to Ukraine, backed by profits from immobilized Russian central bank assets . This financial aid, revealed after her meeting with Ukrainian President Volodymyr Zelenskyy in Kyiv, is part of a broader $50 billion support package developed through negotiations with the U.S. and G7 countries.
The loan is aimed at providing more stable financial assistance to Ukraine and will directly support the country’s national budget. Zelenskyy indicated that Ukraine will allocate the funds towards critical sectors such as energy, shelter construction, weapons production, and air-defense systems. The funds are expected to be disbursed in the coming months.
However, the EU loan plan still requires approval from the European Parliament and a qualified majority of EU member states. This package is linked to a broader agreement by the G7 in June, where approximately $50 billion in fresh aid was promised to Ukraine, with repayments to come from the profits of $280 billion in frozen Russian Central Bank funds, primarily held in Europe.
The loan plan comes with challenges, as the EU's sanctions regime, which keeps these assets frozen, requires unanimous renewal every six months by all 27 member states. Hungary, often a blocker of EU support for Ukraine, has suggested postponing any decisions until after the U.S. elections in November.
To address U.S. concerns, the European Commission has presented member states with several options for extending the immobilization of Russian assets, with suggestions ranging from a 36-month extension to a five-year period. These proposals are under discussion as part of efforts to ensure continued financial support for Ukraine.
The loan is aimed at providing more stable financial assistance to Ukraine and will directly support the country’s national budget. Zelenskyy indicated that Ukraine will allocate the funds towards critical sectors such as energy, shelter construction, weapons production, and air-defense systems. The funds are expected to be disbursed in the coming months.
However, the EU loan plan still requires approval from the European Parliament and a qualified majority of EU member states. This package is linked to a broader agreement by the G7 in June, where approximately $50 billion in fresh aid was promised to Ukraine, with repayments to come from the profits of $280 billion in frozen Russian Central Bank funds, primarily held in Europe.
The loan plan comes with challenges, as the EU's sanctions regime, which keeps these assets frozen, requires unanimous renewal every six months by all 27 member states. Hungary, often a blocker of EU support for Ukraine, has suggested postponing any decisions until after the U.S. elections in November.
To address U.S. concerns, the European Commission has presented member states with several options for extending the immobilization of Russian assets, with suggestions ranging from a 36-month extension to a five-year period. These proposals are under discussion as part of efforts to ensure continued financial support for Ukraine.
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