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2025-09-18 19:47:12
[New EU Funding Trends: How €210 Billion in Russian Assets Can Leverage Ukraine] ⑴ EU officials stated that they are discussing a "reparations loan" plan to use frozen Russian assets to provide financial support to Ukraine in response to market concerns raised by Trump's tariff rhetoric. ⑵ The new proposal, designed to circumvent Hungary's veto, centers on the creation of a special mechanism comprised of a "coalition of the willing," rather than requiring participation from all 27 EU member states. ⑶ The EU proposes replacing Russian assets with zero-coupon bonds, guaranteed by participating countries. While this move carries political risks, the guarantee risk is lower given the assumption that Russian assets remain frozen for a long time. ⑷ Approximately €210 billion (US$250 billion) in Russian assets are currently frozen in Europe. The majority of these have been converted to cash and held at the Belgian securities firm Euroclear, generating relatively limited interest. ⑸ Under the new mechanism, the replaced Russian assets can be invested long-term to generate higher returns, thereby providing greater financial support to Ukraine. If Hungary does not participate, the overall impact will be minimal due to its relatively small economy. 6. The EU is considering transferring these assets to a special purpose vehicle owned by all EU countries or only by the guaranteeing country to achieve more flexible investment and higher returns.
