Why Didn’t the European Union Use Frozen Russian Assets for Its $105 Billion Loan to Ukraine

The European Union has approved a new financial support package for Ukraine totaling $105 billion, marking one of its largest commitments since the conflict began. However, a key detail in this aid package is the EU’s decision not to use frozen Russian assets as the source of funding. Instead, the funding will come from the bloc’s own budget and member state-backed guarantees, allowing for quicker disbursement to meet Ukraine’s urgent needs.

EU officials point to a combination of legal hurdles, political sensitivities, and economic considerations behind this choice. Directly transferring frozen Russian assets to Ukraine could violate international property rights and spark lengthy legal battles, with some member states worried about setting a precedent that could one day impact their own financial systems. Complicated ownership structures and the risk of destabilizing global financial markets added to the reluctance, making internal EU resources the preferred option for now.

While Ukrainian leaders continue to argue that Russian assets should help rebuild their country, the EU views this as a longer-term goal requiring new legal frameworks and broader consensus. For the time being, the large-scale EU loan is designed to stabilize Ukraine’s economy and ensure basic public services continue, while the debate over the use of frozen Russian assets is likely to evolve as international laws and member state positions develop.