According to four officials briefed on the matter, Commission representatives proposed the idea to deputy finance ministers behind closed doors in Brussels on Thursday. The proposition received cautious enthusiasm, but no agreements or commitments were made. One official said a formal proposal could come soon.
Almost €200 billion in Russian assets were frozen in the aftermath of Moscow’s full-scale invasion of Ukraine in February 2022. Most of the assets are held by Euroclear, a financial institution based in Brussels.
With Ukraine facing an estimated €8 billion budget shortfall next year, EU countries are discussing new ideas to continue financing the war-battered country amid squeezed domestic budgets.
By swapping the cash for zero-coupon short-term EU bonds, the Commission believes it will avoid accusations of seizing the money. The idea has not been signed off, and other options for making use of the Russian assets are also on the table, the officials said.
In her State of the Union speech on Wednesday, Commission President Ursula von der Leyen said Ukraine would only pay back the loan once Moscow pays war reparations to Ukraine.
How it would work
Under its rules, any maturing assets that Euroclear holds must be transferred into a deposit account with the European Central Bank, which in turn yields interest on the cash held.