EU Commissioner Dombrovskis: EU to Revisit Use of Frozen Russian Assets for Ukraine Loan

EU Commissioner for Economy Valdis Dombrovskis stated in Riga that the European Union will have to revisit the issue of using frozen Russian assets. This is related to a €90 billion loan, from which the EU will disburse €3.2 billion to Ukraine in June.

Dombrovskis explained that this loan is a reparations loan, and Ukraine is not obliged to repay it until Russia pays reparations. The loan conditions stipulate that in case Russia fails to pay reparations, the EU reserves the right to use the immobilized assets of the Central Bank of Russia. The EU will also provide an interest rate subsidy, making the loan similar to a grant.

The European Commission's initial proposal to finance the loan to Ukraine using immobilized Russian assets did not receive support. Therefore, the loan is currently financed by EU borrowing on the internal market. If Russia does not pay reparations and Ukraine does not repay the loan, it will have to be repaid by EU member states, which would be a significant financial burden. Thus, the question of using frozen assets will arise again.