The EU is reportedly weighing three options to support Ukraine’s 2026-2027 finances, as a proposed €140 billion ($162 billion) reparation loan backed by frozen Russian assets remains blocked.
Ukraine is seeking new external financial support as Moscow’s full-scale invasion nears its fourth year, with current financing plans based on the assumption that hostilities would end by 2026.
EU Commission President Ursula von der Leyen outlined three options in a letter to EU leaders seen by Bloomberg.
The first option would see EU member states provide at least €90 billion ($104.3 billion) in grants over the next two years.
The second option involves issuing a loan backed by joint debt, requiring legally binding guarantees from all member states.
The third option would use nearly €200 billion ($231.8 billion) in frozen Russian assets held by Euroclear to provide Kyiv with a loan.
Under the Euroclear plan, Ukraine would only repay the loan if Russia compensates for the damage it caused. Euroclear would receive a debt contract that would ensure any future claims by Russia are covered by the EU and, possibly, member states.
Belgium, where Euroclear is based, continues to block this approach, demanding stronger guarantees.
Ukraine will need substantial funding early next year. Military spending alone could reach €51.6 billion (nearly $60 billion) in 2026, while overall financial needs may exceed €70 billion ($81.1 billion) in 2026 and €64 billion ($74.2 billion) in 2027, Bloomberg reported, citing an EU Commission document.
The European Commission proposed some adjustments to address Belgian concerns, including access to €25 billion ($29 billion) in Russian assets held in other member states and the coverage of risks from investment treaties.
EU Commissioner for Economy Valdis Dombrovskis told journalists on Monday that accounting for the existing Belgium-Russia treaty “was one of the requests from Belgium and that’s why it’s reflected in this options paper,” but the details are still to be worked out, the media outlet reported.
“It’s important to hear first reactions of member states” to the paper “before starting to precise or elaborate something,” he said.
Ukraine’s growing need for financial support
Ukraine’s economy remains under pressure as Russian attacks intensify, targeting energy infrastructure and causing widespread power outages.
Apart from the EU aid, Ukraine also seeks approval for a new International Monetary Fund (IMF) program. On Monday, the fundʼs mission started policy discussions in Kyiv on the new financing.
Previously, the IMF urged caution on the EU’s planned reparations loan for Ukraine, warning of “any implications for the international monetary system.”
However, Prime Minister Yulia Svyrydenko told reporters that the IMF’s potential new program would proceed independently of the EU’s planned reparations loan, according to Interfax Ukraine.
Ukraine spends around 60% of its budget on the war effort against Russia and depends heavily on Western allies to cover pensions, public sector wages and humanitarian programs.