The European Commission will propose using frozen Russian assets to fund Ukraine, with a loan option if Russia pays reparations.
BRUSSELS: The European Commission will propose a legal plan this week to use frozen Russian assets to fund Ukraine.
Four sources confirmed the proposal includes using the assets directly or borrowing on financial markets.
EU leaders agreed in October to address Ukraine’s urgent financial needs but hesitated on a specific Russian asset plan.
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They had previously considered a EUR 140 billion loan from frozen Russian sovereign assets.
Legal concerns from Belgium, where most assets are held at Euroclear, contributed to the delay.
The Commission’s proposal links loan repayment to Russia paying war reparations to Ukraine.
Ukraine would only repay the loan if Russia compensates for damages from the war.
The EU executive is expected to adopt the proposal on Wednesday.
The favoured plan involves a reparations loan tied to immobilised Russian central bank assets.
The legal text will also allow for a loan funded by EU market borrowing.
It will permit switching between the asset-based and market-borrowing options.
A Commission spokesperson said commissioners will discuss Ukraine financing options on Wednesday.
They are due to adopt the respective legal proposals at their weekly meeting. – Reuters
