The European Union has formally unveiled a €90 billion ($105 billion) loan package for Ukraine, reigniting one of the most contentious debates in European financial and legal circles: whether frozen Russian sovereign assets can ultimately be used to fund Kiev’s war effort and post-conflict recovery. While EU officials insist that the proposal complies with European and international law, critics-both inside and outside the bloc-warn that the move could have far-reaching consequences for the global financial system.

The European Commission presented the so-called Ukraine Support Loan on January 14, framing it as a necessary step to ensure Ukraine’s financial stability and military resilience over the next two years. The package would be financed through joint EU borrowing, with taxpayers across the bloc covering interest costs estimated at a minimum of €3 billion annually for as long as the loan remains outstanding.

Although the Commission stopped short of announcing the outright seizure of Russian state assets, it made clear that the idea remains under active consideration. In its official statement, Brussels said the EU “reserves its right to use the Russian assets immobilized in the Union to repay the loan, in full accordance with EU and international law,” a formulation that underscores both the political determination and the unresolved legal uncertainty surrounding the issue.

Following the escalation of the Ukraine conflict in 2022, Western governments froze approximately $300 billion in Russian central bank reserves. The majority of these funds are held at Euroclear, a Belgium-based financial services company........

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