EU leaders to agree Ukraine financing in 2026-27, Belgium’s approval key

BRUSSELS — European Union (EU) leaders will decide on Thursday how to finance Ukraine in 2026 and 2027 to keep it fighting Russia’s invasion, with the use of Russian assets frozen in the EU the preferred option but hinging on Belgium’s uncertain approval.

The EU wants to keep Ukraine financed and fighting because it sees Russia’s war as a threat to its own security. EU leaders are also keen to show European countries’ agency and strength after US President Donald J. Trump last week called them “weak.”

With US financial help for Kyiv drying up under the Trump administration and EU national budgets already under strain, the EU is looking to use the €210 billion of Russian central bank assets frozen in the bloc as a basis for a loan to Ukraine.

The stakes are high because without the EU’s financial help Ukraine will run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring closer the threat of Russian aggression against the EU.

“If we do not find an answer to that question (of how to finance Ukraine in 2026 and 2027), we will not enable Ukraine to defend itself,” a senior EU diplomat said. “That would have severe implications… for the security of the rest of Europe.”

“It would also have severe implications for the credibility of Europe and underline that we are as weak as Trump apparently thinks we are,” the diplomat said.

REPARATIONS LOAN IS ‘ONLY GAME IN TOWN’
One of the financing options could be for the EU to borrow the needed amount against the security of the EU budget and then lend the money on to Ukraine, but such a move would require unanimity among the 27 EU countries and Moscow-friendly Hungary has already said it would veto it.

Another option would be for each willing EU country itself to raise money on the market and pass it on to Kyiv, but that would mean a rise in the already high debt and deficit levels and a lack of longer-term financing certainty for Ukraine.

Diplomats said the use of the Russian assets was therefore in practice “the only game in town” and favored by most countries because it ensured a large sum for Ukraine without increasing national debts or any immediate fiscal effort.

But to use it, EU leaders first need to convince Belgium, which holds €185 billion of the total €210 billion frozen in Europe, that they will not leave it alone with the bill if Russia successfully sues in international courts over the plan.

Most EU countries are willing to give such guarantees. But Belgian Prime Minister Bart de Wever has argued that because damages awarded to Russia in a successful court case could far exceed the amount held by Belgium and the trial could take place many years from now, he effectively needs a blank check from other governments for an indefinite period.

“There are limits to the guarantees member states could give,” another senior EU diplomat said.

“De Wever seems to want indefinite guarantees, and no EU member state can offer indefinite guarantees. No EU government can go to its own parliament and ask for indefinite guarantees for indefinite amounts of euros. That’s simply not possible,” the senior diplomat said.

The discussions among leaders on Thursday will therefore focus on narrowing down the scope of the guarantees to a form that would also be acceptable to other EU countries, diplomats said, stressing a financing solution for Ukraine will be found.

“This is not a European Council where we can part ways on Friday and not have anything,” a third senior EU diplomat said.

“So a solution will be available on Friday morning.” — Reuters