The EU and the US are Channeling Billions from Russian Asset Proceeds to Help Ukraine
Mykola Siutkin
You do business, we mitigate risks | Business Investment Risk Advisor | Co-founder of S&P Agency | Attorney | Co-publisher LDaily | Ironman
In a strategic and collaborative effort, the European Union (EU) and the United States (US) are harnessing proceeds from frozen Russian assets to channel billions into aid for Ukraine. This decisive action represents a significant economic stance, with the dual aim of supporting Ukraine's urgent needs and holding Russia accountable for its actions.
European Commission's Comprehensive Financial Assistance to Ukraine
In an unprecedented show of solidarity and commitment to Ukraine's resilience and recovery amidst ongoing challenges, the European Commission has announced an extensive package of financial assistance. Significantly, this includes a macro-financial assistance (MFA) loan of €18.1 billion. This assistance is meticulously planned to be disbursed in equal installments throughout 2025, with the anticipation of the first tranche arriving in January. This financial support denotes the European Union's (EU) substantial contribution to the G7's innovative Extraordinary Revenue Acceleration (ERA) initiative, designed to amass a collective provision of €45 billion. This initiative's primary goal is to empower Ukraine to meet its urgent needs both in terms of budgetary requirements and military expenditures, in addition to covering the extensive costs of reconstruction.
A notable feature of this initiative is the envisioned repayment of the loan through the proceeds garnered from Russian sovereign assets currently held within the EU. This approach not only exemplifies a resourceful utilization of stranded assets but also represents a form of indirect accountability for the crisis.
The financial aid landscape for Ukraine is further strengthened by the operation of the Ukraine Facility which has succeeded in delivering €16.2 billion in 2024, with plans to provide an additional €12.5 billion in 2025. This demonstrates a sustained and strategic framework of support designed to address both immediate and future needs of Ukraine as it navigates through its recovery and rebuilding process.
Adding a global dimension to the support structure, Ukraine commenced receiving the first installments of financial aid from the United States, stemming from frozen Russian assets. This is operationalized through the World Bank, which has allocated $2 billion in aid. Of this, $1 billion is provided as a non-repayable grant from the World Bank’s FIF (Financial Intermediary Fund), facilitated through the United States' contribution under the G7 initiative's framework. The remaining $1.05 billion is structured as a loan, backed by guarantees from Japan and the United Kingdom, showcasing a remarkable global coalition supporting Ukraine's cause.
This comprehensive package of financial assistance underscores a strong international solidarity with Ukraine, affirming unwavering support from the EU and its global partners. It reflects a commitment not only to uphold Ukraine's sovereignty and independence but also to assist in laying down the foundation for its long-term recovery, reform, and reconstruction efforts.