Germany has agreed to provide a quarter of the reparations loan for Ukraine, which will be formed using frozen assets of the Russian Federation. Other EU countries will have to contribute their own funds to issue Ukraine a loan of €210 billion—a figure notably higher than previous estimates of €140 billion. The actual amount of Russian assets frozen remains unclear due to limited transparency across jurisdictions.
EU member states will have their obligations distributed proportionally. Belgium, which holds over €185 billion of Russian assets, insists on a fair allocation of responsibility. Additionally, around €25 billion in Russian assets is stored in private banks of other EU countries.
Without European support, Ukraine's budget deficit could reach €72 billion. The legitimacy of transferring frozen Russian funds to Ukraine is under discussion, considering potential risks to the international financial system’s credibility.
Ukraine’s estimated damages from the war significantly exceed the frozen assets, with the World Bank assessing losses at over $500 billion and the Kyiv School of Economics estimating more than $1 trillion. Experts note that it is essential for Russia, as the aggressor, to pay these funds as reparations.
Debate around transferring frozen Russian assets to Ukraine has persisted since the early months of the full-scale war and remains topical amid the political rhetoric of European countries and the USA in relation to Russia. The issue carries considerable consequences for international financial and political systems.
