According to Reuters, Russia could agree to use $300 billion from frozen state assets in Europe for Ukraine’s reconstruction. However, Moscow insists that part of these funds should be spent on the regions controlled by Russia. The first talks between Russia and the United States regarding the end of the war in Ukraine took place on February 18 in Saudi Arabia. Both President Donald Trump and Russian President Vladimir Putin have expressed hopes for a potential meeting soon.
After Putin sent troops to Ukraine in 2022, the U.S. and its allies banned transactions with Russia’s central bank and finance ministry, freezing about $300-350 billion in Russian state assets, mainly European, American, and British government bonds held in European repositories. While discussions are still in their early stages, an idea circulating in Moscow suggests that Russia might propose using a significant portion of these frozen reserves for Ukraine’s reconstruction as part of a possible peace agreement, according to three sources familiar with the matter.
Large parts of eastern Ukraine have been devastated by the war, with hundreds of thousands of soldiers killed or injured on both sides, and millions of Ukrainians fleeing to European countries or Russia. A year ago, the World Bank estimated that reconstruction and recovery would cost $486 billion. The notion that Russia might agree to use frozen funds to help rebuild Ukraine has not been discussed before and may provide insight into how far Russia is willing to compromise as Moscow and Washington seek to end the war while Trump pushes for access to Ukrainian minerals in return for U.S. support.
Key Russian demands to halt the fighting include withdrawing Kyiv’s forces from territories claimed by Moscow and ending Ukraine’s aspirations to join NATO. Ukraine insists Russia must withdraw completely and seeks security guarantees from the West. The Trump administration says Ukraine has unrealistic, ‘fantastical’ goals. Reuters couldn’t confirm whether this idea was discussed between Russian and U.S. counterparts at the Saudi Arabia meeting. The G7 stated in 2023 that Russian state funds will remain frozen until Moscow pays for the damage caused in Ukraine. Trump has said he wants Russia back in the G7, the group of the world’s wealthiest nations. The head of the Russian Central Bank, Elvira Nabiullina, stated Thursday that the bank isn’t involved in any discussions about lifting sanctions or unfreezing Russia’s reserves. Russia has previously declared that plans to use these funds in Ukraine equate to theft.