EU Proposes Novel Financing Solution for Ukraine's Defence

In a bold move to bolster Ukraine's defense efforts, European Commission President Ursula von der Leyen proposed a novel financing mechanism on Wednesday. She suggested the European Union leverage cash balances from frozen Russian assets within Europe. This approach would enable the EU to support Ukraine without directly impacting the capital of the assets.

Addressing the European Parliament, von der Leyen stressed the need for Russia to assume financial responsibility for its actions. "This is Russia's war. And it is Russia that should pay," she asserted. The plan involves creating a Reparations Loan using these assets, with risks collectively borne by EU member states.

While specific financial details remain undisclosed, von der Leyen pointed out existing G7 support of $50 billion for Ukraine. This amount is expected to be repaid from windfall profits on approximately $300 billion in frozen Russian assets across G7 nations. The proposed loan would provide Ukraine with immediate financial relief, with future repayments contingent upon Russia covering war reparations.

(With inputs from agencies.)