EU To Agree With IMF On Size Of Reparations From Russia For Ukraine
- 19.09.2025, 14:27
This will help shore up Kiev's finances amid a reduction in direct U.S. military aid.
The European Commission intends to take into account the International Monetary Fund's assessment of Ukraine's financial needs for the next two years when determining the amount of reparations at the expense of Russian assets.
European Economic Commissioner Valdis Dombrovskis said this, according to Reuters.
The European Union is discussing the use of frozen Russian assets to secure such a loan. This would bolster Kiev's finances amid a reduction in direct U.S. military aid.
"What the European Commission is proposing is a reparation loan. In essence, providing Ukraine with a loan at the expense of cash balances of frozen Russian assets, without affecting Russia's ownership of them," Dombrovskis said.
He said the details, terms and volumes of the loan are being discussed now. Important for determining the volume will be the IMF's conclusion on Ukraine's needs, which the fund is already finalizing.
Spanish Finance Minister Carlos Cuerpo said the European Commission's proposal is expected in October. "From the Spanish point of view, we will support it," he said.
The G7 countries hold about $300 billion of Russian central bank assets, of which a large part is placed in Europe. The Belgian depository Euroclear has 194 billion euros frozen, of which about 170 billion have already turned into cash balances.
Mutual risks and guarantees
Dombrovskis said the mechanism could be applied in all G7 countries where Russian assets are kept. He specified that the idea was discussed with G7 finance ministers.
According to the plan, Ukraine will start repaying the loan only after receiving reparations from Russia. The risks on the loan will be distributed among EU governments.
Sources say the scheme envisages replacing Russian assets in Europe with zero-coupon European Commission bonds. These securities will be backed by guarantees of the EU countries participating in the initiative.
Ukraine's needs
Finance Minister Serhiy Marchenko named Ukraine's needs for external financing for the term of the new program with the IMF.
"In general, the need for funds to finance the four-year program may be from 150 to 170 billion dollars," he told the Verkhovna Rada.
Marchenko confirmed that for 2026 the uncovered need for external financing is now $18 billion according to the estimated average annual exchange rate of 45.7 UAH/dollar.
The current IMF program with Ukraine for 2023-2027 provides for the allocation to Ukraine of $15.6 billion from the fund and about $150 billion from partners. Prime Minister Yulia Sviridenko has asked the IMF for a new program. The IMF is inclined to prepare a new program with Ukraine instead of the current one.