No guarantees’. France fears Ukraine may never repay €140bn European
France has raised concerns about the long-term viability of a proposed €140bn loan to Ukraine, which the European Union hopes to secure using profits generated from frozen Russian sovereign assets. French Foreign Minister Jean-Noël Barrot told France Info that there is “no guarantee” the money will ever be repaid, urging G7 partners to share the financial risk.
“Repayment is not assured”
Barrot stressed that the loan mechanism must not result in the outright confiscation of Russian assets, warning of the legal complications such a step would create. He also pointed to persistent corruption challenges in Ukraine, saying Kyiv must adopt a “zero-tolerance approach” if it hopes to maintain EU support and progress toward membership.
“The EU will not tolerate the importation of corrupt practices into the Union,” he said.
Debate over Russian assets continues
Benjamin Haddad, France’s Minister for European Affairs, reiterated that Paris supports the idea of using profits from frozen Russian assets to help fund Europe’s defence industry. Still, he acknowledged the absence of consensus among EU members.
The European Commission is currently analysing three possible financing models for Ukraine over the next two years:
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A loan backed by profits from Russian assets,
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A joint EU-level loan guaranteed by the EU budget,
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Bilateral loans from individual member states.
Euroclear signals readiness to go to court
Euroclear, the Belgian financial institution that holds much of the frozen Russian funds, has signalled it will challenge any confiscation in court. CEO Valérie Urbain warned that even an indirect seizure would create systemic risks for the eurozone.
Meanwhile, the US is also preparing legislation to enable the seizure of Russian assets, with a significant portion expected to be directed toward Ukraine.
An alternative plan in the making
Due to Belgium’s reservations about confiscation, the European Commission is drafting an alternative plan which may rely on joint EU borrowing or bilateral lending arrangements.
With no consensus yet achieved, funding Ukraine remains a contentious issue in the EU. France insists that any scenario must comply with international law and avoid destabilising Europe’s financial architecture.
