Europe to Loan $38 Billion to Ukraine from Frozen Russian Assets

The European Parliament approved a loan of 35 billion euros, or 38 billion dollars, to Kyiv. This money is intended to strengthen Ukraine's defense capabilities and aid in the country's reconstruction. The European Union's legislative body has considered future revenues from the frozen assets of the Central Bank of Russia abroad as the repayment method for this loan, with a significant portion of these frozen assets located in the EU. The approval of this package coincides with an escalation of heavy attacks by the Russian army against Ukrainian forces on the eastern fronts and an increase in drone and missile attacks on cities and energy infrastructure in Ukraine. These attacks resulted in the deaths of seven civilians, including three children, on Tuesday, October 23, 2023. This loan is part of the EU's share of a larger $50 billion package for Ukraine from the G7 countries. This comprehensive plan, officially referred to as the 'Accelerated Income Loan' to Ukraine, was announced in July. On the first day of Aban (October 23), one month after the agreement of European governments, EU lawmakers approved the package with 518 votes in favor, 56 against, and 61 abstentions. Karin Karlsbro, a special expert in the European Parliament on EU financial aid to Ukraine, noted that the allocation of revenues from Russia's frozen assets as a repayment source for the loan indicates that 'from the very first day of Vladimir Putin's war against Kyiv, it was clear that one day Moscow would have to pay for the reconstruction of Ukrainian society and its future.' Didier Reynders, the EU Justice Commissioner, argued that this loan is not meant to be 'a burden on those who have been attacked; rather, the repayment will fall on the aggressor.' Russia has protested the West's use of its frozen assets, estimated to be worth around $300 billion, calling the action illegal and threatening retaliation. Simultaneously, the UK announced a loan of $2.4 billion to Ukraine for modern weaponry as part of the G7 comprehensive plan. According to a statement from the UK government, Defense Minister John Healy and Treasury Minister Rachel Reeves announced this during a visit to Ukrainian forces undergoing military training in the UK. The statement confirmed the allocation of this loan to support Ukraine's military budget and emphasized that London's support for Ukraine in the 'battle for freedom from Vladimir Putin's aggression' has been unwavering and will continue as long as necessary. The new UK loan adds to previous commitments from London, including an annual military aid of $3.9 billion and a $16 billion package of military, economic, and humanitarian support for Kyiv. The allocation of substantial new loans from the EU and the UK to Ukraine comes as missile and drone warfare between Russia and Ukraine intensifies ahead of winter. On one hand, Russian attacks on Ukraine's energy and logistical infrastructure have increased, while on the other hand, Ukraine has targeted Russian resources, refineries, and fuel and weapon depots in western and central regions of the country in recent months. At the same time, Ukrainian President Volodymyr Zelensky has intensified efforts to obtain permission to use Western long-range weapons to strike targets deep within Russia.