The EU is looking for a funding formula for Ukraine for 2026-2027: what the European Commission proposes
3 December 20:38
The European Commission has presented two mechanisms to provide funding for Ukraine in 2026-2027. This was reported by the European Commission, "Komersant Ukrainian" reports.
They emphasized that Kyiv needs stable support to cover its budgetary needs, strengthen the defense industry and further integrate into the European defense industry ecosystem.
Two financial proposals
The European Commission proposes to adopt one of two instruments or a combination of them:
- A loan from the EU based on the Union’s budgetary capacity and can be realized from the so-called “budgetary reserve”.
- Areparations loan is a new mechanism that allows borrowing funds secured by profits or cash balances held in EU financial institutions and related to the frozen assets of the Central Bank of Russia.
According to media reports, the European Commission has been proposing for a long time to provide Ukraine with up to €140 billion through the use of frozen Russian assets. However, Belgium remains the key opponent of this decision.
Why Belgium is blocking the initiative
Belgium has the largest share of frozen Russian assets in the EU – they are stored in the Belgian financial depository Euroclear. Brussels fears that the country could become a target of legal or financial claims from Russia if the EU uses these assets as collateral or a source of credit.
Therefore, Belgium insists that all EU countries provide collective guarantees that minimize potential risks.
Guarantees from the European Commission
The President of the European Commission, Ursula von der Leyen, said that the reparations loan is proposed to be backed by “robust guarantees” to deter possible Russian countermeasures.
The package of such guarantees includes:
- bilateral contributions from EU member states;
- the EU budget reserve mechanism;
- legal guarantees against potential lawsuits;
- a ban on the transfer of frozen sovereign assets back to Russia.
Details are to be made public after approval by the EU Council.
EU leaders will meet on December 18 to make a final decision on which of the two options will form the basis of financial support for Ukraine.
European Commissioner for Economic Affairs Valdis Dombrovskis said that the new proposals “are in line with international law, maximize pressure on Russia and send a clear message that its aggression will not prevail.”
