Media: Brussels proposes €140bn loan to Ukraine funded by frozen Russian assets

The European Commission has sent EU member states a document proposing the use of frozen Russian assets to fund a new €140 billion loan for Ukraine.

As reported by Politico, the proposal was presented to national capitals ahead of a meeting of EU ambassadors on Friday 26 September, where they are preparing the groundwork for next week’s European leaders’ summit in Copenhagen.

The general outline has been informally discussed over several weeks. Under the plan, Ukraine would begin repaying the loan only after Russia ends the war and pays post-war reparations. 

The EU would then compensate the Belgian financial firm Euroclear, which holds the frozen Russian assets.

The loan to Ukraine is proposed to be disbursed in tranches. The funds could be used for both defence cooperation and ordinary budgetary needs in Kyiv.

The European Commission also suggested changing the rules for extending sanctions – moving from unanimity to qualified majority – to reduce the risk of Hungary blocking the process and of Russian assets being returned.

On Thursday 25 September, German Chancellor Friedrich Merz supported the idea, emphasising that the loan should fund exclusively military assistance.

Sanctions are also on the agenda of today’s Coreper II meeting, as the Danish presidency rushes to prepare the 19th package ahead of the leaders’ summit in Copenhagen.

EU leaders will meet in Copenhagen on 1 October to discuss, among other things, further support for Ukraine through broader use of frozen Russian assets.