EU, G7 Expected to Share Risks Using Frozen Russian Assets for Ukraine Support

The European Union and G7 countries are exploring a legal and financially viable mechanism to use approximately 210 billion euros of frozen Russian state assets to support Ukraine’s defense and reconstruction following Russia's 2022 invasion. The proposed plan involves converting these frozen funds into zero-coupon bonds issued by the European Commission, backed by EU member states, to provide an interest-free "Reparations Loan" to Ukraine, contingent on Russia eventually compensating for war damages. ECB President Christine Lagarde emphasized that any such scheme must comply with international law to avoid undermining the euro's credibility and financial stability; she also stressed the need for consensus among parties holding these assets. Dutch Prime Minister Dick Schoof highlighted the importance of distributing the legal and financial risks associated with this initiative across the EU and G7 to prevent disproportionate burdens on countries like Belgium, which has expressed concern about assuming excessive risks. Both EU and G7 leaders aim for a coordinated framework with clear responsibilities and transparent asset governance to accelerate financial support for Ukraine while maintaining regional stability and legal soundness. Although some skepticism remains, political support is strengthening, and discussions continue to finalize a legally sound approach to mobilize these frozen assets for Ukraine’s benefit.