Ireland to co-guarantee €140bn Ukraine loan from frozen Russian assets, says Taoiseach

Ireland will help guarantee a €140bn loan to Ukraine using frozen Russian assets, without affecting its military neutrality

T

Ireland is committed to co-guaranteeing a €140bn “reparations loan” for Ukraine, based on frozen Russian assets held in European banks, the Taoiseach has said.

Micheál Martin said Ireland’s participation in the plan will not have implications for the country’s military neutrality.

“We are militarily neutral, we're not members of NATO, we're not members of any military alliance, but countries like Ukraine have a right to defend themselves”, the Taoiseach told reporters in Brussels on Wednesday.

“But Ireland will act as a co-guarantor no matter what way legislation emerges,” he said. “I don't believe there are implications for Irish neutrality,” the Taoiseach added.

The European Commission is expected to publish a detailed outline of the plan in the coming weeks. For now, the EU is assessing political support among member states for taking on the responsibility of effectively seizing Russian assets and transferring them to Ukraine.

Funds derived from the frozen Russian assets will help Ukraine purchase weapons for its defence against Russia’s full-scale invasion and support its national budget.

The Taoiseach said Ireland believes Russia must pay for the destruction it has caused in Ukraine, adding that Europe should not bear the entire financial burden of supporting Kyiv.

He said the proposal was necessary due to the “behaviour of Russia in violating the UN charts and territorial integrity of Ukraine and sovereignty, and then destroying the country's civilian infrastructure, energy infrastructure, kill civilians and expect others to pay for it.” 

“There has to be an economic cost to such flagrant violations of international law, and I see it very much in that context”, said Mr Martin.

He added that the funds from Russian assets will allow Ukraine “survive and to sustain its economy and its society, because Europe is doing a hell of a lot in terms of underpinning Ukraine's economy at the moment”, he said.

The €140bn in Russian assets is mainly held at the Euroclear financial repository in Belgium.

The European Commission has proposed that EU member states guarantee a loan for Ukraine based on these assets. The funds will then be transferred to Kyiv.

If Russia eventually agrees to pay reparations for its war in Ukraine, the money could be returned to Moscow, though there is little expectation this will happen.

Mr Martin joined EU leaders in Brussels on Wednesday to discuss a range of issues, including the war in Ukraine, the ceasefire in the Middle East, and the future of European defence strategy. Europe’s so-called “drone wall” and other defence measures are considered increasingly urgent following recent incursions by Russian jets and drones into European airspace.

Ukrainian President Volodymyr Zelenskyy attended early discussions on Ukraine and welcomed the latest round of US sanctions against Russian energy companies, calling them “very important.”

“We waited for this. God bless it will work and this is very important”, he said.

This marks the first round of sanctions imposed on Russia by the Trump administration since taking office in January.

EU leaders agreed to explore further the idea of using frozen Russian assets to fund Ukraine, but effectively failed to agree concretely.

President of the European Council - the body which represents the EU member states - Antonio Costa said: "Today, the European Council delivered an important message: The EU is committed to addressing Ukraine's pressing financial needs for the next two years, including support for its military and defence efforts."

The Belgian government is still highly cautious about unintended consequences which could flow from the effective seizure of Russia capital to transfer to Ukraine, including damage to its financial services sector and the Belgian state being on the hook for years of legal arbitration should Russia decide to litigate the decision in the courts.

Speaking after his meeting with EU leaders Thursday evening, President Zelenskyy said he was grateful for their ongoing support and willingness to consider the plan to transfer the assets.

He said Ukraine will need the money for use in 2026 and 2027 for the Ukrainian state, and for the production of weapons to defend his country from constant Russian shelling.

"We need to use any kind of Russian money for Ukrainian production. It's cheaper and quicker. We are talking about long range, about drones, missiles", he said.

He said Ukraine is willing to negotiate at any time to end the war.

"If Russia is ready to talk, we are ready to talk. The plan starts with sitting down and talking, not using missiles against civilians."