Key facts
- Germany is leading a push to use frozen Russian assets to back a new loan for Ukraine.
- The proposed loan could replace a portion of the €100 billion earmarked for Ukraine in the EU's next long-term budget.
- Countries including Sweden, Poland, the Netherlands, and Spain support using the €210 billion in frozen Russian assets.
- Belgium, where most of the assets are held, fears legal repercussions from Russia.
- The proposal aims to avoid cuts to other EU budget areas, such as support for farmers and regions.
A group of countries, spearheaded by Germany, is re-engaging in discussions about utilizing frozen Russian assets to support Ukraine. The proposal involves a new loan for Kyiv, with the frozen assets serving as collateral. This initiative is intended to reduce the financial burden on the EU's upcoming long-term budget, aligning with Germany's objective to trim overall spending.
Diplomats and officials indicate that this loan could substitute a portion of the €100 billion previously allocated to Ukraine within the EU's budget framework. Several nations, including Sweden, Poland, the Netherlands, and Spain, are reportedly in favor of leveraging the approximately €210 billion in frozen Russian assets for this purpose. However, Belgium, which currently holds the majority of these funds, has expressed reservations, citing concerns about potential legal challenges from Russia, which led to the rejection of a similar plan last year.
One diplomat suggested that the current proposal presents a choice for countries like Belgium: either finance Ukraine's support through the existing budget, potentially diverting funds from sectors like agriculture or regional development, or utilize the Russian assets to free up substantial financial resources.