Ukraine Gets €210 Billion Loan from Frozen Russian Assets

What the problem that is being addressed
The war that began on 24 February 2022 has left Ukraine with huge financial gaps.

• Ukraine’s defence budget is projected at €56 billion for 2026‑27, but only €22 billion has been secured.
• The country needs an additional €43 billion in international aid to cover defence, reconstruction and macro‑financial stability.
• The EU and its Member States have already supplied €187.3 billion to Ukraine, but the remaining needs exceed what can be raised by the Union alone.
• Russia’s assets are frozen in the EU; the accumulated cash balances in EU banks (≈ €210 billion) are idle because they cannot be paid to the Russian Central Bank.

How that problem is being solved here
The Regulation creates a Reparations Loan to Ukraine of up to €210 billion.

• The loan is a limited‑recourse instrument that will be repaid only when Ukraine receives reparations from Russia (cash or non‑monetary assets).
• The EU will borrow the money from EU banks using the idle cash balances that arise from the sanctions on Russian assets.
• Member States provide irrevocable, unconditional guarantees that cover the loan, proportionate to each state’s share of the EU’s Gross National Income.
• The loan is disbursed in tranches, with a maximum of four instalments, and is available until 31 December 2030 (designated budget assistance until 31 December 2055).
• Ukraine must submit a yearly Financing Strategy; the Commission assesses it, and the Council approves the amount to be released.
• The loan supports two main areas:

1. Macro‑financial assistance (up to €95 billion, including €45 billion for the ERA‑Loans programme).
2. Defence‑industrial capacity (up to €115 billion) to help Ukraine rebuild its defence industry and integrate with the EU defence market.

• Conditions include that Ukraine maintains democratic institutions, the rule of law, and fights corruption.
• The loan is complementary to the existing Ukraine Facility (Regulation (EU) 2024/792) and the G7 ERA‑Loans.

What changes as a result of this document

• A new EU instrument – the Reparations Loan – is established, providing a predictable, continuous, and flexible source of finance for Ukraine.
• The loan is financed by borrowing from EU banks, using the idle cash balances created by sanctions on Russian assets, and is backed by Member‑state guarantees.
• Ukraine will receive up to €210 billion, with €90 billion earmarked for 2027, and the loan will be available until 2030 (with a special €‑budget line until 2055).
• The loan is limited‑recourse: it becomes due only when reparations from Russia are paid.
• The EU’s financial exposure is capped by the guarantees and by the fact that the loan is repaid from reparations, not from the EU budget.
• The Regulation strengthens the EU’s coordinated response to the war, aligns with the Ukraine Facility, and supports Ukraine’s path toward EU membership.