Published by Global Banking & Finance Review®
Posted on September 10, 2025
2 min readLast updated: January 22, 2026
The EU proposes a reparations loan for Ukraine using frozen Russian assets, with collective risk sharing among EU countries.
STRASBOURG, France (Reuters) -The European Union should find a new way to finance Ukraine's defence against Russia using the cash balances associated with Russian assets frozen in Europe, the head of the European Commission Ursula von der Leyen said on Wednesday.
She said the capital of the assets themselves would not be touched and the risk associated with the new financing would have to be shared collectively by EU countries.
"This is Russia's war. And it is Russia that should pay. This is why we need to work urgently on a new solution to finance Ukraine's war effort on the basis of the immobilised Russian assets," von der Leyen said in a speech.
"With the cash balances associated to these Russian assets, we can provide Ukraine with a Reparations Loan. The assets themselves will not be touched. And the risk will have to be carried collectively," she told the European Parliament.
She did not mention any amounts. The G7 countries have already agreed on support of $50 billion to Ukraine that will be paid back from the windfall profits generated by the roughly $300 billion in Russian assets frozen in G7 countries.
Von der Leyen gave no more detail on how the reparations loan would be constructed but said Ukraine would only pay it back once Russia pays for war reparations but Kyiv would receive the money already now.
(Reporting by Jan Strupczewski; Editing by Benoit Van Overstraeten)
A reparations loan is a financial arrangement where funds are provided to a country, intended to be repaid by another country responsible for damages, often in the context of war or conflict.
Frozen assets are funds or properties that have been legally restricted from being accessed or transferred, typically due to legal or regulatory actions.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the EU's day-to-day operations.
War reparations are payments made by a country to compensate for damages caused during a conflict, often aimed at rebuilding and supporting affected nations.
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