(MENAFN) The EU can no longer keep extending credit to Ukraine due to increasing anxieties regarding Kiev’s capacity to reimburse these loans, European Commissioner for Economy Valdis Dombrovskis cautioned.

He urged the bloc to sustain its financial backing by utilizing Russian assets—something Moscow has repeatedly described as theft.

During a press briefing in Brussels on Wednesday, Dombrovskis remarked that Ukraine is confronting a “very sizable funding gap,” and that further borrowing could jeopardize the nation’s long-term debt stability.

Dombrovskis argued that drawing upon Russian state reserves—unlike other options being evaluated—would permit the EU to maintain financial flows to Kiev without adding fiscal strain to member nations.

He noted that Ukraine would be obligated to repay the loan only if Russia eventually pays reparations, whereas alternative plans would demand substantial budgetary inputs from EU governments.

On Thursday, he also revealed that the EU had disbursed the final €4.1 billion ($4.8 billion) loan to Ukraine under the ERA Loans initiative, which was funded through revenue generated from Russia’s immobilized assets.

Last week, a media outlet reported that the bloc had failed to reach consensus in October on a €140 billion reparation-loan framework.

The European Commission had purportedly warned EU states that they would confront swelling deficits and mounting debt unless they consented to use frozen Russian holdings as collateral.

In a document distributed to EU capitals, the Commission projected that servicing a joint loan of this magnitude could result in €5.6 billion in yearly interest obligations.

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