EU offers Ukraine 1.6 billion euros in financial aid
European Union Transfers €1.6 Billion from Frozen Russian Assets to Ukraine
The European Union has announced the transfer of €1.6 billion from the proceeds of frozen Russian assets to Ukraine, marking the third tranche of such transfers. This significant allocation will primarily support Ukraine through the Ukraine Loan Cooperation Mechanism (ULCM), with 95% of the funds directed towards this purpose, while the remaining 5% will be provided to Ukraine through the European Peace Facility (EPF) to address urgent military and defense needs [1][2][3].
Starting from this third tranche, the majority of support has shifted from the EPF (which previously received 90% of funds) to the ULCM. The ULCM offers non-repayable support to help Ukraine repay the EU macro-financial assistance loan and loans from bilateral lenders under this mechanism. This strategic allocation forms part of a €45 billion credit support framework designed to assist Ukraine's financial stability [1][3].
The funds accumulated during the first half of 2025 come from interest earned on frozen Russian Central Bank assets held by EU securities depositories [1][3]. The total value of frozen Russian assets, including securities and cash, is approximately $280 billion, primarily through the Belgian clearing house Euroclear [5].
The European Union received these funds last Friday, August 8, as part of its ongoing sanctions against influential Russian individuals, which have frozen assets worth around $58 billion, including luxury real estate, yachts, and private jets [4]. This strategic allocation enhances Ukraine's ability to manage debt repayments while sustaining essential military assistance.
In summary:
| Allocation Mechanism | Percentage of Third Tranche (€1.6 billion) | Purpose | |-----------------------------------------|-------------------------------------------|----------------------------------------------------| | Ukraine Loan Cooperation Mechanism (ULCM) | 95% (~€1.52 billion) | Non-repayable support for loan repayments | | European Peace Facility (EPF) | 5% (~€80 million) | Military and defense needs support |
This allocation reflects the EU's sustained commitment to Ukraine, combining debt relief with continued military support amid the ongoing conflict [1][4].
References:
- EU transfers €1.6 billion from frozen Russian assets to Ukraine
- EU to allocate €1.6 billion from frozen Russian assets to Ukraine
- EU to channel €1.6 billion from frozen Russian assets to Ukraine
- EU transfers €1.6 billion from frozen Russian assets to Ukraine
- Belgian clearing house Euroclear holds €280 billion in frozen Russian assets
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