The European Union is planning to provide Ukraine with a $165 billion loan to support the war effort. The loan will be backed with Russian assets frozen by Western nations. The Kremlin stated that the EU scheme amounted to theft and pledged a response.
Under the plan, European nations would lend Ukraine $165 billion. Kiev would not have to begin repaying until Ukraine receives war reparations from Russia. It is unlikely Moscow will make post-war payments to Kiev unless Russia loses the war.
The EU holds about $200 billion in frozen Russian assets. Some nations have already tapped into those funds to send arms to Ukraine.
The Danish Prime Minister said the bloc is making progress in implementing the planned loan; however, legal hurdles remain. Some members of the EU are hesitant to implement the scheme, and the European Central Bank is concerned that using frozen Russian assets will hurt the credibility of the Euro.
Europe sees the loan as necessary to fund the proxy war against Russia in Ukraine. Ukrainian President Zelensky has said that the war will cost $120 billion, and Kiev can only provide $60 billion. Previously, Washington paid for the bulk of the Western military aid to Kiev, but President Donald Trump has demanded that Europe arm Ukraine by buying American weapons.
The European Commission’s president stated that the loan was necessary to continue funding the war. “We need a more structural solution for military support,” EU President Ursula von der Leyen, said on Tuesday. “This is why I have put forward the idea of a reparations loan that is based on the immobilized Russian assets.”
Russia responded sharply to reports of the EU scheme. “We are talking about plans for the illegal seizure of Russian property. In Russian, we call that simply theft,” Kremlin spokesman Dmitry Peskov told reporters. “The boomerang will very seriously hit those who are the main depositories, countries that are interested in investment attractiveness.”
Leonid Slutsky, the head of the State Duma’s international affairs committee, said, “European bureaucrats are nothing but thieves, who finance Zelensky’s terrorist regime. They will answer in court for every euro cent, and will return everything to Russia.”
The Kremlin has moved towards retaliatory seizures of Western assets in Russia to recoup the money taken from Russian accounts in the EU. Last year, the finance ministry claimed Russia has about the same value in Western assets as the West has in frozen Russian funds.
