The European Union (EU) has proposed financing Ukraine with a 90 billion euro ($104 billion) subsidy or a loan backed by EU debt if European countries cannot approve a plan to provide a “reparation loan,” financed by frozen Russian assets, Bloomberg reports.
According to a letter addressed to the leaders of the Member States by the President of the European Commission, Ursula von der Leyen, the community bloc is analyzing three options to finance kyiv: Member States would finance at least €90 billion in subsidies for 2026-2027; joint EU debt would be contracted to issue a loan; or frozen Russian funds would be used to provide a “reparation loan,” the preferred option.
“We have identified three main options: support financed by Member States through grants, a limited recourse loan financed by Union loans on the financial markets, or a limited recourse loan linked to the cash balances of stranded assets,” Von der Leyen said in the letter.
However, in a document attached to the letter, the president of the EC specified that “the three options are not mutually exclusive” and “they can be combined or sequenced.” “Given the urgency of the situation, the varied complexity of the options and the need to begin disbursements by the second quarter of 2026, any option selected could be designed as transitory and of limited duration,” reads the document, cited by Reuters.
kyiv financial needs
The media detail that, according to the document, of the 135.7 billion euros ($157.2 billion) needed for the period between 2026 and 2027, Ukraine would need 83.4 billion ($96.6 billion) only for its Army and 52.3 billion ($60.6 billion) for other expenses. The needs would be higher in 2026, reaching a total of 71.7 billion euros ($83.1 billion), and lower in 2027, rising to 64 billion euros ($74.1 billion).
Bloomberg notes that the impact of subsidies would be between 0.16% and 0.27% of the gross domestic product of EU member states. Likewise, it details that any loan from the European Union would require its members to “provide legally binding, unconditional, irrevocable and upon request guarantees.”
Given the urgency, Von der Leyen urged countries to make the decision quickly and expressed hope that a compromise would be reached at the next European Council meeting in December.
Since February 2022, the US and EU member countries have frozen more than $300 billion in Russian state assets. According to the European Commission, some 209.2 billion euros (about $242.7 billion) of these assets are in the community bloc, most of them deposited in the Belgian financial company Euroclear.
Belgian authorities oppose the asset seizure proposals, demanding that other European countries share the risks and agree a debt contract that would ensure that any future claims by Russia would be covered by the EU and, potentially, member states. Citing sources familiar with the matter, Bloomberg notes that talks last week between Ursula von der Leyen and Belgian Prime Minister Bart de Wever failed to make any progress.
Moscow’s firm stance
Russian Foreign Minister Sergei Lavrov warned that Moscow “will respond appropriately to attempts to steal its assets” and called the European Commission’s actions “a blatant deception and theft.” He also assured that this confiscation of reserves “will not save kyiv.”
“Apparently, the ancestral instincts of colonizers and pirates have been awakened in Europeans,” he denounced. “No matter how orchestrated the plan to expropriate Russian money is, there is no legal way to implement it,” Lavrov reaffirmed.
The spokesperson for the Foreign Ministry, María Zajárova, stated that they would consider countries that confiscate the assets “thieves” and promised “very tough” countermeasures. With RT
#evaluates #options #continue #financing #kyiv