Jens Asbjørn Bøgen
Ukraine wants complete discretion on how to use the frozen assets.
European leaders are edging closer to approving a long-debated plan that could unlock billions of euros in frozen Russian assets for Ukraine — a proposal first raised years ago and once dismissed as unrealistic.
Deputy Head of Ukraine’s Presidential Office Iryna Mudra, who has championed the initiative since 2022, says the shift marks a major breakthrough. But as discussions advance, Kyiv is drawing a firm line: it wants no strings attached to how the funds are used.
“It hasn’t been as quick as we would have liked, but we didn’t give up,” Mudra told the Kyiv Independent in an exclusive interview on Oct. 22.
Shifting momentum
When Mudra first proposed redirecting Russia’s frozen sovereign assets toward Ukraine’s recovery and defense, she says European partners were hesitant. Now, leaders are rallying behind a plan for a reparations loan that could deliver up to 140 billion euros, guaranteed by those same frozen funds.
Kyiv, however, wants complete discretion. “We know best where these resources are most urgently needed,” Mudra said. “Ukraine’s position has remained consistent — frozen sovereign Russian assets must become a real financial instrument for Ukraine’s defense, recovery, and justice.”
For now, priorities include bolstering Ukraine’s defense capacity, repairing war-damaged infrastructure, and investing in its growing defense industry. Mudra estimates more than half the money would go toward military needs.
Recent Russian strikes have knocked out power for over 100,000 people in northern and eastern regions, making energy repairs another urgent goal.
A fund for recovery
Beyond immediate defense, Kyiv also wants a share of the funds to seed a long-term compensation and recovery mechanism — a pool that could be invested similarly to Norway’s sovereign wealth fund.
“Some money should be kept for a compensation and recovery fund,” Mudra said, emphasizing the need to balance short-term survival with long-term rebuilding.
That plan ties into Ukraine’s earlier push for an International Compensation Mechanism, proposed in May 2022, which would allow victims of Russia’s war to file claims for damages — something no existing court currently provides.
“Ukraine’s long-term goal is the full transfer of $300 billion in Russian frozen assets to Ukraine,” Mudra noted.
Flexibility first
Ukraine’s fiscal situation adds urgency to the debate. The country faces a $60 billion budget gap in 2026–27, and the proposed loan could help bridge it.
“Of course, if there are some critical budget needs, this should be a possibility,” Mudra said. “It may even be necessary to spend all the money on defense, if that’s what we need to survive.”
France has suggested that the money should only finance European-made weapons, according to internal European Commission documents seen by the Kyiv Independent. But Kyiv is pushing for broader flexibility — including the option to purchase from non-EU suppliers like the United States.
Speaking at a European Council briefing on Oct. 23, President Volodymyr Zelensky echoed the point, citing the need for U.S. technology capable of intercepting Russian ballistic missiles that have battered Ukraine’s energy grid.
Waiting for payouts
Even with growing support, Mudra acknowledges that some EU countries may resist allocating funds for compensation before 2027 or 2028, when the first claims are expected to be processed.
Still, she argues that both immediate defense spending and future reparations are essential pillars of Ukraine’s survival and justice.
“The goal has never changed,” she said. “These assets should not just sit idle — they must work for Ukraine.”
This article is made and published by Jens Asbjørn Bogen, which may have used AI in the preparation
