Von der Leyen: Similarly to Reparations Loan, Ukraine would only need to pay back the loan once it receives reparations from Russia

European Commission President Ursula von der Leyen explained that, like the reparation loan, which was not supported by EU leaders, the agreed financing solution is similar to a reparation loan in that Ukraine will only repay the debt once it receives reparations from Russia.

She said this at a press conference held on Friday night following the European Council meeting.

“Member States have agreed to finance Ukraine through EU borrowing on the capital markets. For an amount of EUR 90 billion for the next two years. We will do this by way of enhanced cooperation that is backed by the EU budget headroom. And based on a unanimous agreement to amend the MFF. Similarly to the Reparations Loan, very important, Ukraine would only need to pay back the loan once it receives reparations. Until then, the assets will remain immobilised. And the Union reserves its right to make use of the cash balances to finance the loan,” the President of the European Commission detailed.

Von der Leyen emphasized that a just and lasting peace for Ukraine was the motto of today’s discussion. “So we gathered with a clear objective: to address Ukraine’s pressing financing needs for the next two years. And I am very pleased to say: we made it. We have secured an agreement to deliver on the financing needs for Ukraine for the next two years,” she stressed.

The President of the European Commission recalled that two decisions had been proposed and that they are “both legally sound and both technically feasible.” “On the one hand, we proposed EU borrowing on the market. And on the other hand, we have developed the Reparations Loan. Last week already, we sent a clear and strong political message by immobilising Russian assets in the EU over the long term. And building on that, we agreed to find a solution for the financing of Ukraine for the next two years,” von der Leyen added.