Commission puts forward dual funding plan to cover Ukraine’s needs in 2026–27
The European Commission on Wednesday outlined two financing options to help Ukraine meet its budgetary needs over the next two years, as the country continues to weather Russia’s full-scale invasion. The package centres on fresh EU borrowing and a so-called “reparations loan” backed by revenues generated from immobilised Russian state assets.
The proposals are anchored in five draft legal acts and follow months of pressure from EU leaders to establish a longer-term support structure. With Russia showing no sign of easing its military campaign, officials say Ukraine’s fiscal gap is widening and predictable external funding is essential.
Wednesday’s package delivers on the European Council’s October 2025 request for a durable funding framework and follows further guidance issued by Commission President Ursula von der Leyen in November.
Adaptable measures
The measures are designed to be adaptable, providing support whether Ukraine remains in active conflict or moves into reconstruction. They come amid intensified Russian strikes on critical infrastructure, a rise in hybrid attacks across the EU and repeated airspace incursions.
Von der Leyen said the proposals are intended to ensure Kyiv can defend itself and negotiate peace from a position of strength. The plan includes bridging Ukraine’s budget needs for 2026–27, bolstering its defence industry and deepening its integration with Europe’s own defence-industrial base.
We are increasing the cost of Russia’s war of aggression
"We are proposing to create a Reparations Loan, using the cash balances from immobilised Russian assets in the EU, with strong safeguards for our Member States", von der Leyen said. "We are increasing the cost of Russia’s war of aggression. And this should act as a further incentive for Russia to engage at the negotiating table.”
Berlin has been among the strongest advocates of the plan, with Chancellor Friedrich Merz rallying support ahead of Wednesday’s meeting. But Belgium, which is home to Euroclear, where the bulk of the frozen Russian assets are held, has resisted the reparations-loan component. Around 185 billion euros of the EU-blocked assets sit at the Brussels-based securities depository.
Belgian officials argued the country would carry disproportionate legal and financial exposure if Russia were to challenge the scheme in court. Foreign minister Maxime Prévot (Les Engagés) warned that any adverse ruling could leave Belgium liable for sums equivalent to the federal state’s annual budget. “If Russia takes us to court, it has every chance of winning,” he cautioned.
“Belgium cannot absorb that kind of risk,” stressed the Foreign Minister. Nevertheless, the Commission pushed ahead with the plan, despite the fact that the Russian authorities had denounced the idea and senior banking figures in Moscow had threatened decades of litigation if the EU proceeded.
© NICOLAS TUCAT / AFP
Related News
