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EU transfers € 1 billion to Ukraine from frozen Russian assets for aggressor to pay for destruction

The transfer emerges from a G7-led initiative, which aims to eventually provide approximately $50 billion in assistance to Ukraine using interest from $280 billion in frozen Russian funds.
byVira KravchukandbyYana Olynets
09/05/2025
3 minute read
Protest Ukraine activists make Russia pay reparations
A protester holds a sign calling to confiscation $300bn of frozen Russian assets. Credit: Olena Halushka
EU transfers € 1 billion to Ukraine from frozen Russian assets for aggressor to pay for destruction

Ukraine secured a €1 billion ($1.1 billion) tranche from the European Union, funded by proceeds from immobilized Russian Central Bank assets, as part of the broader Extraordinary Revenue Acceleration (ERA) program.

The ERA program, spearheaded by G7 nations, pledged approximately $50 billion in total assistance to Ukraine, designed to stabilize the Ukrainian economy and support its longer-term reconstruction.

These loans will be serviced using future earnings generated from Russian sovereign assets currently frozen in EU member states and partner jurisdictions.

Ukraine’s long-term recovery from the war will require hundreds of billions of dollars and the government believes that a large-scale reconstruction should be funded using the approximately $300 billion in frozen Russian assets. The majority of these funds, around €210 billion, are located in Europe, primarily managed by the Belgian central securities depository Euroclear. These assets will remain immobilized until Russia provides compensation for the crimes committed against Ukraine.
Prime Minister Shmyhal announced the new funding, stating it would address critical budget needs and strengthen Ukraine’s position.

“This tranche is part of a fair and consistent approach: the aggressor must pay for the destruction it has brought to our land,” Shmyhal wrote in his statement.

Shmyhal also expressed his gratitude to the EU and G7 partners for an “effective mechanism.”

“We expect the next step — full confiscation of assets and stronger sanctions in response to Russia’s atrocities,” Shmyhal wrote.

Ukraine plans to use up to €3 billion from Russia’s frozen assets to boost funding for its domestic arms production, according to Ukrainian Minister of Strategic Industries Oleksandr Kamyshin. While Ukraine resumed producing artillery ammunition, the scale of the war means it still depends heavily on partner countries for supplies, with funding being the main bottleneck.

In January 2025, the founder of Hermitage Capital Management, Sir Bill Browder, warned that if the $300 billion in frozen Russian assets are not seized and given to Ukraine, Europe and the UK could face a massive refugee crisis and heightened security risks.

Browder argued that transferring these funds to Ukraine would allow it to sustain its defense for several more years without relying on additional Western military aid, which is especially critical if US support wanes under Trump.

He cautioned that forcing Ukraine into territorial concessions could trigger the exodus of 15–20 million refugees to Western Europe and the UK, while also increasing the risk of further Russian aggression against the Baltic states.

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