Brussels: The European Commission is moving forward with a proposal to use frozen Russian sovereign assets to help Ukraine, despite legal and political challenges among member states. The plan, expected to be formally presented this week, focuses on creating a loan structure backed by around 140 billion euros in Russian state assets held inside the European Union.
Under the proposal, Ukraine would receive long term financial support and would only be required to repay the loan if Russia eventually compensates Ukraine for the damage caused by the war. European officials say this structure is meant to ensure Ukraine gets financial support even without immediate reparations from Moscow.
However, the plan is facing obstacles. The European Central Bank has declined a request to act as a financial backstop for the loan, saying doing so could violate its mandate and create financial risks. Without the bank's support, the commission may need to depend more heavily on borrowing from financial markets or alternative guarantees.
Some European Union members are cautious about the proposal. Belgium, where many of the frozen Russian assets are kept through the financial institution Euroclear, has raised concerns about possible legal disputes. Officials warn that Russia could challenge the move in international courts, potentially leading to long running legal battles.
Supporters of the plan argue that Ukraine urgently needs predictable financial assistance, especially as existing funding from allies may decrease in coming months. They say using frozen Russian money is both fair and necessary to help Ukraine continue operating its government and rebuilding damaged infrastructure.
Opponents warn the move could deepen tensions with Russia and create future diplomatic and financial risks. Russian officials and state banking representatives have already said the European Union could face decades of legal appeals if the assets are used.
The proposal still needs backing from all EU member states before any funds can be released. Negotiations are ongoing, and final approval is expected to take time.
For now, European officials say the priority is ensuring Ukraine has financial stability and support as the war enters another winter.