The European Commission has floated a new plan to channel billions of euros in frozen Russian assets to Ukraine by swapping the cash for EU-issued debt, Politico reported on Sept. 12.
One EU official described the proposal as “legally creative,” saying it could unlock significant additional funding for Ukraine’s military support without technically seizing the Russian assets — a move seen as legally risky.
Four officials familiar with the discussions said the idea was presented to deputy finance ministers behind closed doors in Brussels. The proposal was met with “cautious enthusiasm,” though no agreements were reached. An official said a formal proposal could come soon.
Under the plan, the European Commission would exchange cash for short-term EU zero-coupon bonds, avoiding direct accusations of asset confiscation. The proposal remains under consideration, alongside other options for using frozen Russian assets.
Nearly €200 billion in Russian assets were frozen after Moscow’s full-scale invasion of Ukraine in February 2022. Most are held by Euroclear, a Brussels-based financial institution.
On Aug. 27, U.S. Treasury Secretary Scott Bessent said he opposed immediate confiscation of Russian assets, arguing they should remain a pressure tool in negotiations with Moscow. Belgian Prime Minister Bart De Wever has taken a similar view, favoring keeping the assets in Euroclear.
On Aug. 29, Politico reported that the Commission was developing a plan to use frozen Russian assets to help rebuild Ukraine after the war. The idea was to invest the funds in higher-risk projects to generate greater returns while pressuring Russia over its refusal to end the conflict.
Hungary has filed a lawsuit with the EU Court of Justice challenging the use of frozen Russian assets to fund military aid to Ukraine through the European Peace Facility without Budapest’s consent.
Lithuanian Foreign Minister Kęstutis Budrys said skepticism remains across the EU about proposals to tap Russian assets.
“There is still a lot of skepticism in the EU, even if you can convince them of the necessity and explain why it should be done,” he said.
EU considers debt swap plan to channel frozen Russian assets to Ukraine / The New Voice of Ukraine
