The EU is developing a scheme to transfer frozen Russian assets to Ukraine without confiscating them: what is known

The European Union is preparing a mechanism that would allow Ukraine to transfer frozen Russian assets without their formal confiscation. Under the new scheme, Russia would remain the nominal owner of the funds, but Kyiv would actually be able to use them.

This is reported by the Financial Times.

According to journalists, the option of purchasing interest-free EU bonds with frozen Russian money stored in the Belgian depository Euroclear is being considered. After that, Russia will formally receive a replacement for its assets in the form of Eurobonds, while the funds spent on their purchase will be transferred to Ukraine in tranches.

Of the total amount of 194 billion euros frozen in Euroclear, approximately 170 billion are already past due and are in the form of liquid currency that can be used to finance this scheme.

Last week, European Commission President Ursula von der Leyen supported the idea of so-called “reparations loans” to Ukraine. She emphasized that this money could start working for Ukraine now, and Russia would only be able to get it back after paying reparations to Kyiv.

It is emphasized that Brussels has intensified technical work on the proposal due to the decreasing chances of peace negotiations and the reluctance of the Donald Trump administration to increase pressure on Moscow or increase military support for Ukraine. It is also noted that the US expects Europe to transfer not only interest, but the entire principal amount of assets to Ukraine.

Despite the idea’s advancement, there remains resistance from several key EU countries — notably Belgium, Germany, and France. They fear that transferring the bulk of Russian assets to Ukraine could undermine confidence in the euro as an international reserve currency.

However, Germany’s position is gradually changing. Against the backdrop of reduced American support for Ukraine, Berlin is increasingly inclined to shift the financial burden of the war onto Russia itself, using its frozen funds. EU finance ministers are expected to meet in Denmark this week to discuss a mechanism for reparations loans to Ukraine.

Earlier, Ukraine received another tranche of financial assistance from the European Union in the amount of 1 billion euros. The funds came from the proceeds of frozen Russian assets and are part of a large-scale G7 initiative to support Ukraine.

It has been reported that the European Commission is working on creating a special fund that could attract almost 200 billion euros in frozen Russian assets . These funds are planned to be used to support the post-war reconstruction of Ukraine.

Instead, Hungary filed a lawsuit with the Court of Justice of the European Union against the Council of the EU over its decision to use frozen Russian assets to finance aid to Ukraine.

By the way, Belgium also does not agree to the confiscation of frozen Russian assets stored in its banks.

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