The European Union is moving toward a controversial new phase in its support for Ukraine that intertwines military aid, industrial policy, and the legally fraught issue of frozen Russian assets. Under a proposal reported by Bloomberg, Brussels aims to introduce strict “Buy European” procurement rules tied to a potential multibillion-euro loan for Kiev, funded by the proceeds generated from Russian state assets immobilized in the bloc. The initiative reflects not only the EU’s desire to sustain Ukraine’s war effort but also a growing determination to use the conflict as a catalyst to expand Europe’s own defense industry-while sharply limiting the role of non-European suppliers, particularly the United States.

At the heart of the plan are roughly €210 billion ($246 billion) in Russian central bank assets frozen in Western jurisdictions since the escalation of the Ukraine conflict in 2022. While EU leaders have long stopped short of outright confiscation, citing legal and financial risks, they have increasingly explored ways to extract economic value from the funds. The latest proposal centers on using the interest and investment proceeds generated by those assets to back a long-term loan for Ukraine, framed by Brussels as a form of “reparations” for war damage. Moscow, however, has repeatedly rejected this characterization, denouncing any use of the funds as theft and warning of retaliatory legal and economic measures.

What distinguishes the current plan from earlier discussions is its explicit linkage between financial support for Ukraine and the strategic interests of Europe’s defense sector. According to the draft circulated among member states, the bulk of funds disbursed under the scheme would be directed to defense suppliers based in the EU and Ukraine. Participation by non-EU countries would be tightly limited, with only narrow exemptions for close partners such as Norway. The........

© Blitz