Russia’s assets to the front: EU and allies develop mechanism to help Ukraine

The European Union, together with its allies, is preparing a political decision on using part of frozen Russian reserves to finance aid to Ukraine. The United Kingdom and Canada have already declared their readiness to act synchronously with the EU.

This is reported by Bloomberg.

This concerns assets of the Central Bank of the Russian Federation worth almost $300 billion, which were frozen in the G7 countries after the start of the full-scale invasion. The initiative is aimed at strengthening financial and defense support for Ukraine, in particular in the context of arms purchases, including supplies from the United States.

Western officials say EU countries and partners are close to agreeing on a lending mechanism that would allow them to raise some of that money without outright confiscation, which is currently blocked by legal risks. The idea is to use the assets themselves, rather than their potential value, as collateral.

Part of the funding is planned to be directed towards armaments, in particular due to the fact that the Donald Trump administration (if he returns to power) may demand payment for the supply of American weapons in advance. The rest will go to support the Ukrainian economy.

According to the British Foreign Office, more than £25 billion (≈$33.3 billion) of Russian assets have been frozen in the UK.

In EU countries — over €200 billion (≈$232 billion).

Until now, Ukraine has only received profits and interest accrued on these funds.

The largest part of Russia’s reserves is stored in the Belgian clearing system Euroclear, which is causing concern in Belgium and some other EU states. Brussels is insisting on creating a legal protection mechanism that would make it impossible for Russia to sue.

In this context, the EU or a group of countries are ready to provide guarantees to Euroclear to cover possible legal risks, but a final decision has not yet been made.

According to sources, a political agreement could be reached as early as next week during a meeting in Brussels. After that, the European Commission will receive a mandate to develop an appropriate legal mechanism that will allow real financing to begin in the second quarter of 2026.

British Prime Minister Keir Starmer confirmed his readiness to act in coordination with the EU after talks with the leaders of France and Germany. According to Starmer, the allies are also working with the United States, where some of the Russian funds are located.

In a joint statement, the leaders of the three countries emphasized:

“We are ready to take concerted measures to use frozen Russian state assets to support the Armed Forces of Ukraine in order to push Russia to negotiate.”

It is also noted that the parties intend to develop new mechanisms to pressure the Russian Federation, including sanctions against the “shadow fleet” that Moscow uses to circumvent restrictions.

As a reminder, Ukraine is forming a mechanism for submitting claims to the international registry of damages and compensation commission to determine the total amount of damage caused by Russian aggression . The process is based on individual applications from citizens and companies that have suffered from Russia’s actions.

As reported, the European Union is preparing to provide Ukraine with a “reparation loan,” the amount of which could reach 130 billion euros.

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