The International Monetary Fund (IMF) on Friday urged caution on the EU’s planned “reparations loan” for Ukraine, which would convert Russian sovereign assets into bonds, warning of “any implications for the international monetary system.”
The loan, backed by the €176 billion ($191 billion) in frozen Russian central bank assets held at Euroclear in Belgium, would allow the EU to shift the cash from the assets to equivalently valued EU bonds.
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However, IMF European Department Director Alfred Kammer told Kyiv Post the agency cannot comment on the loan’s financial design during the presentation of the October 2025 Regional Economic Outlook for Europe.
“With regard to the financing modality, we don’t have a particular view on the financing modalities,” Kammer said.
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When asked whether transferring cash from frozen Russian assets into EU-issued bonds could pose risks for European capital markets, Kammer said the decision should have solid legal grounds and not place stress on the “international monetary system.”
“We recommend when it comes to the utilization of frozen Russian assets that countries who consider doing this look for a strong legal underpinning before doing so and are also beware of any implications for the international monetary system,” he said.
Kammer did not specify what those implications could be.
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Jamison Firestone, a New York-based attorney, previously told Kyiv Post that the EU’s proposed reparations loan for Ukraine poses no additional risk to Euroclear or Belgium, as their holdings would simply shift from cash to equivalently valued EU bonds.
Warnings from Saudi Arabia that using frozen Russian assets could harm G7 bond markets and undermine confidence in Western sovereign bonds were also called “politically motivated market noise” by economist Elina Ribakova.
“The European Central Bank (ECB) is too large and too powerful for any investor group to move against,” she said, adding that the ECB сan purchase bonds when instability stems from external or politically driven causes or directly counter speculative attacks, ensuring that government borrowing costs remain stable.
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Belgian Prime Minister Bart De Wever has insisted that the other 26 EU countries share the legal and financial risks and jointly guarantee the loan, to prevent Belgium from being solely liable for repayment to Russia if sanctions are lifted and Russia seeks compensation for its assets.
The IMF has estimated Ukraine’s financing gap for 2026-2029 at $65 billion, according to a well-informed source who spoke to Kyiv Post.
Ukraine expects $37.4 billion in international financing over the next two years, leaving a similar shortfall.
The National Bank of Ukraine (NBU) projects $35 billion in external inflows in 2026 and $30 billion in 2027, but Deputy Governor Sergiy Nikolaychuk noted that funding sources remain unidentified for $12.7 billion in 2026 and $29 billion in 2027.