European Union announces €35 billion loan to kyiv, financed by frozen Russian assets

A new helping hand from Brussels to kyiv. The European Union is considering granting a loan of 35 billion euros to Ukraine, financed by the profits generated by Russian assets frozen in Europe, announced on Friday, September 20, the President of the European Commission, Ursula von der Leyen, during a trip to kyiv (Ukraine). “I am pleased to announce that the Commission has adopted the proposals which will enable the European Union to lend 35 billion euros” to Ukraine, she said at a press conference alongside Ukrainian President Volodymyr Zelensky. “It’s a huge step forward”she added. “We are now confident that we can provide this loan to Ukraine very quickly.”

Some €200 billion of Russian assets were frozen in the EU after the Russian invasion began in February 2022. In total, around 90% of these assets are in Belgium, home to the international depository organisation Euroclear. In May, the EU-27 reached an agreement to use the interest generated by these frozen assets from the Russian central bank, which are expected to generate between €2.5 billion and €3 billion per year, to help arm Ukraine and finance its post-war reconstruction.

The G7 countries then agreed on a global loan of up to 50 billion euros for Ukraine, financed by the interest generated by these frozen Russian assets. However, the decision was difficult to implement because of the guarantees requested by the United States. Washington wanted to ensure that the freezing of Russian assets would be done over time to avoid any disruption in financing.