EU Plans Loan Backed by $350B Frozen Russian Assets for Ukraine Defense

European leaders are increasingly considering the use of frozen Russian assets, estimated at around $350 billion, to support Ukraine financially, including a proposed €140 billion reparations loan to fund Ukraine's defense and recovery. Ukraine, led by officials like Iryna Mudra, insists on having full autonomy over these funds without conditionality, prioritizing military needs, energy infrastructure repairs, and compensation for damages. The European Union plans to use profits from these frozen assets to finance Ukraine's budgetary needs for 2026 and 2027, including military equipment acquisition, but faces legal and political challenges, notably from Belgium, which holds a significant portion of the assets and demands risk-sharing among EU member states to protect against potential lawsuits from Russia. EU leaders expect to issue an official legal proposal soon, aiming to provide stable, medium-term financial support to Ukraine, while Russia warns of retaliatory measures against Western investments. Ukrainian President Volodymyr Zelensky has urged the EU to make a positive political decision to unlock these funds, emphasizing Russia's responsibility for the war and damages, despite existing legal complexities and criticisms from Russia.