Published by Global Banking & Finance Review®
Posted on December 18, 2025
1 min readLast updated: January 20, 2026
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EU leaders propose a reparations loan for Ukraine, backed by Russia's frozen assets, to support defense industries by 2026.
BRUSSELS, Dec 18 (Reuters) - According to a draft document seen by Reuters, which could still change, European Union leaders will ask EU institutions to urgently adopt instruments to establish a reparations loan backed by cash balances linked to Russia's frozen assets.
The draft lists several conditions for the loan, including full respect for the contractual obligations of asset holders, equal treatment, compliance with bilateral investment treaties, and a requirement that the funds support both EU and Ukrainian defence industries.
The draft also said EU leaders want the reparations loan to provide financial support for Ukraine starting in the second quarter of 2026, including its military needs.
In the document, the text about the reparations loan was in square brackets which means the proposal had not yet been adopted and may still change as talks go on.
(Reporting by Jan Strupczewski, Writing by Charlotte Van Campenhout, Editing by Sudip Kar-Gupta)
Frozen assets refer to financial assets that have been restricted from being accessed or transferred, often due to legal or regulatory actions, typically in response to sanctions or legal disputes.
Compliance in finance refers to the process of adhering to laws, regulations, and guidelines that govern financial practices and operations, ensuring that organizations operate within legal frameworks.
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