Tsahkna described the Commission's proposal, which came earlier than expected, as a strong starting point for detailed negotiations and decisions.

"The European Commission's proposal is a breakthrough," Tsahkna said. "We must ensure that these assets remain out of Russia's reach and that not a single euro is returned until Russia has fully compensated Ukraine for the damage it has caused," he continued, via a ministry press release.

"Russia's war of aggression against Ukraine violates the most fundamental principles of the UN Charter and international law," he continued. "The damage already exceeds €500 billion, and Russia has shown no intention of offering compensation. This decision makes one thing clear: Russia will pay for its actions."

"Ukraine needs at least US$40 billion a year simply to survive," Tsahkna went on. "Europe remains steadfast — we will not allow Ukraine's future to depend on short-term budgets. It is time to use the aggressor's own money to rebuild what it has destroyed," he continued.

The foreign minister pointed out that Estonia has been in the vanguard of calling for mobilizing frozen Russian assets for Ukraine's benefit, since the full-scale invasion began, in February 2022.

Under the new proposal, Ukraine will receive a €90 billion loan, utilizing frozen Russian Central Bank assets held within the EU, which total up to €210 billion in holdings across the bloc.

These funds would provide long-term and predictable financing for Ukraine's post-war reconstruction and continued defense.

Earlier this week the issue had been hampered by Belgian concerns about the repercussions of utilizing the frozen funds, the bulk of which are held in Belgian banks.

Belgium, also home to the European Commission and several other EU institutions, feared that releasing these could lead to it facing international arbitration claims from Russia, and even called the EU proposal "fundamentally wrong," asking for guarantees from other EU nations.

The European Commission had been hesitant to green-light the use of the funds, even as the basis for a loan rather than reparations, though at the time Tsahkna said "the legal solution exists."

Using the frozen assets would also reduce Russia's ability to pressure the U.S. in peace negotiations, he noted.

A final decision on using Russia's frozen assets will likely be made at a European Council meeting in mid-December.

Tsahkna had originally said a commission stance on the matter would come next week.

Brussels insider publication POLITICO Europe reported the European Commission is proposing a reparations loan of €165 billion for Ukraine using the cash value of frozen Russian state assets held in Belgium, according to documents obtained by the publication. This reparations loan is part of a wider financial package, worth up to €210 billion, to keep Kyiv's finances afloat for the coming years.

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