EU Turns Frozen Russian Assets into Loan for Ukraine — Financial Times

European leaders are preparing a large-scale financial plan to support Ukraine, which includes granting Kyiv a €140 billion interest-free loan. The funds will come from frozen assets of Russia’s Central Bank held in Euroclear. Ukraine would only be required to repay the loan if Moscow eventually pays reparations.

According to the Financial Times

The initiative has received strong backing from German Chancellor Friedrich Merz. EU capitals see this move as a way to guarantee long-term financing for Ukraine’s war effort while also safeguarding the eurozone from instability. A key condition is that the money will be used strictly for defense needs — weapons procurement, military equipment, and production systems, primarily from European manufacturers.

Brussels views the plan as a powerful signal to Moscow: Europe is ready to sustain Ukraine for as long as necessary. In addition, EU defense ministers are already discussing the creation of a “drone wall” for collective security and strengthening joint defense policy amid Russia’s ongoing aggression.