Europe does not give 140 billion euros: what are the risks for Ukraine and what will happen next?
2 December 2025 15:32
The European Central Bank has refused to support a mechanism that would have allowed the EU to pay Ukraine €140 billion secured by frozen Russian assets in Euroclear. This was reported by the Financial Times, and the news immediately sparked a wave of discussion: what happened, is this really a demarche against Ukraine, how critical is the situation, and what needs could this amount cover?
What happened and why the ECB said “no”
The European Commission offered to provide Ukraine with a €140 billion loan secured by frozen Russian assets held in the Belgian depository Euroclear.
To avoid risks for the market, the ECB was asked to act as a creditor for Euroclear, i.e. to insure the liquidity system.
The ECB refused, explaining that
- such a mechanism goes beyond the regulator’s mandate;
- it would actually mean direct financing of EU governments, which is prohibited by ECB rules;
Europe would have to cover possible losses of the quasi-governmental structure (Euroclear), which creates legal risks.
Belgium also opposed the use of Russian assets as collateral.
After that, the European Commission started looking for a “plan B”.
Why Europe is not ready to give Ukraine 140 billion euros
Economic expert Oleksiy Hetman in a commentary
According to Hetman, it would be unrealistic to expect the EU to immediately transfer all of Russia’s frozen funds to Ukraine. The reason is simple: these assets are already working to support Ukraine through the ERA (Extraordinary Revenue Acceleration) program.
“There is no demarche. It is expected that they do not want to give us these 140 billion. First of all, because these 140 billion are already being used to help us through the ERA program,” the expert explains.
“Now this money – about 140 billion euros – is in accounts in European depositories, and interest is accruing on it. It is the income from these funds that has already become part of the financial support for Ukraine.
How much has Ukraine already received and will receive in the future
The EU has used a mechanism of pre-financing the revenues that will be generated by Russian assets. In fact, it gave Ukraine money in advance.
“We have already been paid $50 billion in advance of the interest accrued on these funds. And we will receive a small balance. Therefore, these assets should remain in Europe for at least 10 years,“ Hetman clarifies.
In other words, the resource has already been “put at the service” of Ukraine’s needs – just not in the form of a complete confiscation.
Why it is not critical for Ukraine to receive all 140 billion at once
Despite the lack of partial funding in the 2026 budget, Hetman emphasizes that international assistance to Ukraine remains stable and large-scale.
“The Europeans, together with the Americans, give us about $40 billion annually. This allows us to finance essentially all our needs,” the expert says.
The scheme is simple:
- ukrainian taxes go mainly to defense and war;
- international funds are used for social spending, healthcare, education, pensions, and support of the budget system.
“Our taxes go to the war and defense, and with these 40 billion in international funds we finance education, healthcare, social security and everything else. Therefore, we have sufficient support from the international community, and we already have funds from Russian assets,“ explained Hetman.
Thus, there is no critical funding failure: Western partners are actually “holding” Ukraine’s social sector.
The ECB has simply confirmed its old position
Economist Oleg Pendzin in a commentary
According to Pendzin, there is no point in talking about a “new refusal” by the European Central Bank. ECB President Christine Lagarde has never publicly supported the confiscation of Russian assets.
“The ECB spoke negatively about the confiscation and freezing of Russian assets back in 2023. That is, by and large, their position has not changed, they have just now confirmed the position they have been proclaiming all along,” the economist notes.
Financing Ukraine: the deficit for 2026 is growing
Penzin emphasizes that the problem is not so much the ECB’s active position as the fact that Ukraine already lacks $19 billion to cover its macro-financial needs next year.
“So the actual issue of financing Ukraine, which already has $19 billion for the next year, without knowing where to get it, remains extremely acute. That is, I understand that Ukraine will not receive a reparations loan in the near future. That’s why Belgium clearly spoke out against it, and the ECB supported Belgium,“ the economist said.
According to him, Ukraine needed $60 billion for the next year to purchase American weapons. Another $45 billion was needed for other needs. And a separate $19 billion is the macro-financial hole.
“And these 19 billion dollars are simply not available today,” the expert explains.
Without these funds, even the adoption of the state budget becomes a mere formality.
“What can you vote for if there is no source to cover 19 billion? Well, you can vote for anything, but it remains a piece of paper, not a legally binding document,” says Pendzin.
Plan B for Europe: Eurobonds instead of confiscation
Since Belgium (the country where most of the assets of the Russian Federation are kept) clearly denies their seizure, and the ECB supports its position, the EU is likely to move to an alternative mechanism.
“They will use plan B – the issue of Eurobonds to finance Ukraine. They will be issued by individual EU countries, raising funds in the financial markets to further finance Ukraine,” Penzin said.
However, the economist warns that the amount of such funding will be more modest than the potential income from Russian assets.
Why Europe will still look for money for Ukraine
Despite the difficulties, Pendzin is convinced: The EU will not abandon its support for Ukraine. The reason is strategic.
“The situation is extremely difficult, in my opinion, but I think the Europeans will find a way out, because for them, even Orban said that Ukraine should remain a buffer zone because no one trusts the Russians. And in order for Ukraine to remain a buffer zone, it is necessary to feed the army,” the economist explains.
Europe is well aware that without sustainable funding for Ukraine’s defense and social needs, the risk of war spreading to the EU is growing.
“Europeans realize that they have to pay for Ukrainian blood, and I think they will find something now,“ the expert added.
A compromise may be the final outcome – but not without conditions
Pendzin does not rule out that the aid will come, but it may be smaller and contain strict financial conditions.
“Another thing is that it will be some kind of bondage conditions or some other misfortune, and we’ll see how it goes. So for now, the situation is uncertain for me,” he concludes.
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