EU unveils plan to fund Ukraine with loans tied to frozen Russian assets

European Commission President Ursula von der Leyen has called for a strong and united European response to the recent drone incursions at the EU’s borders, underlining the urgency of pressing forward with the creation of a “drone wall” to bolster security.

Her remarks came just minutes before the start of the European Commission Security College meeting in Brussels, where she was joined by NATO’s Secretary General Mark Rutte, Caliber.Az reports via foreign media.

While investigations are ongoing into the source of drone incidents in Denmark, Rutte stated that “when it comes to Poland and Estonia, it is clear that it is the Russians.” He noted that NATO is still evaluating whether these actions were deliberate, but emphasised that “even if it is not intentional, it is reckless and it is unacceptable.”

Turning to the war in Ukraine, von der Leyen praised Kyiv’s resilience, stressing that the country has “virtually not lost any territory this year” despite the continued fighting. She said the EU’s sanctions “are working” and confirmed that preparations are underway for the bloc’s 19th package of restrictive measures against Moscow.

She also highlighted an agreement between the EU and Ukraine under which a total of €2 billion will be allocated for drones, allowing Kyiv to significantly scale up its capacity. In addition, von der Leyen pointed to the European plan for so-called “reparation loans,” which would be linked to frozen Russian assets. A portion of the funds would be channelled into strengthening Europe’s own defence industry.

Providing further detail, von der Leyen explained that these loans would be disbursed gradually, in tranches and with conditions. Part of the loan would be tied to procurement within Europe to reinforce the continent’s defence sector. 

She underlined that the scheme does not involve outright seizure of Russian assets, but rather creates a system where Ukraine must repay the loan unless Russia itself fulfils its obligation to pay reparations. “The perpetrator must be held responsible,” she concluded.

By Tamilla Hasanova