In a stunning escalation of Europe’s financial strategy against Moscow, European Commission President Ursula von der Leyen announced Wednesday that the EU is ready to turn frozen Russian assets into a massive loan for Ukraine—potentially worth up to €140 billion. The move marks one of the most aggressive economic steps yet in response to Russia’s ongoing war.
Speaking before Members of the European Parliament in Strasbourg, von der Leyen declared that the Commission will soon present a legal framework allowing frozen Russian funds held in EU countries to be used as a “reparations loan” to Kyiv.
“We cannot imagine a scenario in which European taxpayers alone foot the bill,” she said, making clear that Moscow must bear financial responsibility for its invasion.
Belgium in the spotlight
The majority of the frozen assets—largely belonging to the Russian Central Bank and sanctioned oligarchs—are held in Belgium, which has so far blocked the proposal. Brussels has urged the Commission to consider alternatives, including issuing new EU debt, rather than directly reallocating Russian wealth.
But von der Leyen dismissed the idea that Europeans should continue paying for Ukraine’s defense and reconstruction alone, calling that prospect “unacceptable.”
Strategic stakes rise
The proposal comes as Ukraine faces enormous military and economic strain, and as Western governments grapple with funding fatigue. The loan could cover Ukrainian financial needs for the next two years, according to Berlin and Brussels.
German Chancellor Friedrich Merz has strongly backed the plan alongside von der Leyen, arguing that Russia’s frozen reserves must play a central role in financing Ukraine’s survival and rebuilding.
Peace negotiations in motion
Von der Leyen also tied the financial plan to broader peace efforts. She described the updated U.S. peace proposal as a “starting point” for ending the conflict, stressing that any agreement must include:
- security guarantees for Ukraine
- preservation of Ukrainian sovereignty
- the return of abducted Ukrainian children
“The situation is unstable and dangerous, but there is an opportunity for real progress,” she said.
EU foreign ministers are expected to discuss the issue later Wednesday, amid growing debate over how far Europe should go in pressuring Russia financially while supporting Ukraine militarily and politically.
Analysts warn that Moscow will view the move as economic warfare, potentially triggering retaliation.