UK Plans Reparations Loans Using £25B Frozen Russian Assets to Fund Ukraine War Effort

The U.K., led by Chancellor Rachel Reeves, is exploring the use of billions of pounds in frozen Russian state assets to fund loans to Ukraine, aiming to support its war effort and reconstruction without violating international law. This plan, announced during a meeting with European counterparts in Copenhagen, aligns with a similar European Union proposal to use Russian assets to back loans to Ukraine, avoiding outright confiscation which could lead to legal and political challenges. The U.K. holds about £25 billion in frozen Russian assets, while the EU has approximately €185 billion frozen in Belgium's Euroclear. The proposed "reparations loan" would allow Ukraine to receive funds now and repay only once Russia pays for war reparations, emphasizing financial responsibility and legality. This initiative comes amid growing calls for more radical measures to utilize Russian funds, following recent aggressive Russian incursions into NATO territories that have heightened tensions. The U.K. and EU continue to coordinate closely to develop mechanisms that support Ukraine while managing legal risks associated with immobilized Russian assets.