EU proposes $105bn Ukraine aid using frozen Russian assets

Published: 04 December 2025. The English Chronicle Desk. The English Chronicle Online

The European Commission has unveiled a groundbreaking plan to raise 90 billion euros ($105 billion) to support Ukraine’s war effort against Russia, proposing an unprecedented use of frozen Russian assets or international borrowing. The initiative aims to cover two-thirds of Ukraine’s financing needs for 2026 and 2027, leaving the remainder for international partners to provide.

Commission President Ursula von der Leyen emphasized that the plan is designed to ensure Ukraine has the means to defend itself while negotiating peace from a position of strength. “We are increasing the cost of Russia’s war of aggression, which should act as a further incentive for Russia to engage at the negotiating table,” she said.

The proposal offers two options: an EU loan sourced from the private market or a “reparations loan” funded using Russian state assets frozen in the EU following Moscow’s 2022 invasion of Ukraine. EU officials noted that the scheme would not amount to confiscation, as Ukraine would only repay the funds if Russia provides reparations for war damages.

Belgium, however, has voiced persistent concerns about the reparations loan, warning of legal risks and potential obstacles to a peace deal. The Belgian government has demanded assurances that EU countries would cover legal costs from any future Russian lawsuits challenging the scheme. France, Germany, Sweden, and Cyprus are also key holders of frozen Russian assets that could be used to fund the loan.

The proposal will require approval from 15 out of 27 EU member states to proceed, while the alternative borrowing option would normally require unanimity, posing a challenge given Hungary’s opposition. Russia has criticized the plan, calling it theft, and threatened decades of litigation. The proposal has reportedly been positively received by the US Treasury, reflecting continued Western support for Ukraine’s defence and post-war reconstruction.

The EU’s plan underscores its strategic commitment to Ukraine, combining financial innovation with geopolitical considerations as the conflict with Russia persists. It also reflects the complex legal and political challenges that come with using frozen state assets in unprecedented ways, highlighting the delicate balance the EU seeks between support for Ukraine and managing member states’ concerns.