Politico: EU finds “creative” way to transfer frozen Russian assets to Ukraine

The European Commission (EC) is promoting a new idea for transferring billions of euros in frozen Russian assets to Ukraine — replacing the money flowing to Kyiv with EU-guaranteed IOUs.

Politico writes about this, citing sources.

The new proposal, which the publicationʼs interlocutor described as "legally creative", could open up a significant additional financial flow for Ukraine without the actual expropriation of Russian assets themselves, which would be legally risky.

According to four officials familiar with the matter, European Commission officials floated the idea behind closed doors at a meeting of deputy finance ministers in Brussels on September 11.

The proposal was met with cautious enthusiasm, but no agreements or commitments were reached. One official said a formal proposal could be forthcoming.

EC has proposed exchanging cash deposits linked to assets for zero-coupon bonds that would be jointly guaranteed by EU countries. That idea has not yet been approved, and other options for using Russian assets are also being considered, officials said.

Frozen Russian assets

The value of frozen Russian sovereign assets in the EU is almost €211 billion. In total, the European Union, the G7 countries and Australia have frozen approximately €260 billion in securities and cash.

In October 2024, the EU Council finally approved a loan of up to €35 billion to Ukraine. This money is the blocʼs contribution to the G7 initiative to provide Ukraine with a $50 billion (€45 billion) loan, which will be repaid with the proceeds from frozen Russian assets.

A few days after the EU Council decision, the G7 countries agreed to a $50 billion loan for Ukraine using proceeds from Russiaʼs frozen assets. The US contribution was $20 billion.

The European Commission on August 29 began developing a mechanism to transfer almost €200 billion of frozen Russian assets. The EU is considering transferring the assets to a “special purpose holding company” supported by the G7 countries.

The €18 billion from the EU will be paid in full by the end of the year — which is why they are again looking for a new solution regarding frozen Russian assets.

The UK government on September 4 directed £1 billion from the proceeds of frozen Russian assets to purchase military aid for Ukraine.

The head of Belgiumʼs Foreign Ministry said on September 5 that the country would not transfer proceeds from frozen Russian assets to aid Ukraine because it would jeopardize Belgiumʼs reputation as a financial services center.

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