Here are the EU’s new ways to help Ukraine

On Wednesday, the EU Commission published an official proposal on how Ukraine can be helped in 2026 and 2027 by using the funds frozen from Russia and the EU budget.

The chairman of the commission Ursula von der Leyenin according to this, the EU would cover two-thirds of the needs of the Ukrainian state for two years with these support measures. This means 90 billion euros.

The Commission’s presentation has been awaited for a long time, as Ukraine’s cash reserves are threatening to run out as early as next spring. In addition, the EU countries should make a decision on financing Ukraine at the December summit.

On Wednesday, the Commission presented two possible solutions: EU fundraising, which would be based on the “buffer capacity” of the EU budget. It would be a loan from the EU budget. The member countries should make a decision on the loan unanimously.

As another solution, the Commission proposes a war reparations loan, which would give the Commission the authority to borrow cash from EU financial institutions that manage funds frozen by the Russian central bank. This decision could be taken by the member states with a qualified majority.

According to Commission President von der Leyen, the proposals ensure that Ukraine has the means to defend itself and promote peace negotiations so that Ukraine is in a strong position.

“We present solutions that will cover Ukraine’s financial needs over the next two years, support the state budget and strengthen its defense industry and its integration into the European defense industrial base,” said von der Leyen.

Frozen funds

The EU has frozen a total of around 210 billion euros of Russian central bank funds since Russia invaded Ukraine in 2022.

“We are proposing the creation of a compensation loan using cash from Russian assets frozen in the EU, with strong safeguards for our member states. We are raising the costs of Russia’s war of aggression, and this should act as an additional incentive for Russia to come to the negotiating table,” von der Leyen said on Wednesday.

Ukraine should pay back a possible war reparation loan only after Russia has stopped its war of aggression and paid reparations to Ukraine.

The most significant stumbling block in the passage of Ukraine support is still Belgium, which is afraid of financial and security risks related to the arrangement, because most of the cash assets frozen from Russia are the Central Securities Depository of the Belgian-registered Euroclearin on accounts.

The Belgian foreign minister who participated in the NATO meeting on Wednesday Maxime Prévot reiterated Belgium’s earlier view that the Commission’s proposal does not adequately address Belgium’s concerns.

The Belgian government has demanded, among other things, financial guarantees from other EU countries to cover the risks. According to Prévot, other countries have not shown enough solidarity towards Belgium.

According to the Commission, the proposals it presented on Wednesday include several safeguards aimed at protecting member states and financial institutions from possible Russian retaliation and illegal expropriations outside of Russia.

Next, the European Parliament and the Council of Member States discuss the Commission’s proposal. The Commission hopes that the matter will progress quickly.