EU taxpayers will have to pay 3 billion euros a year in interest on a loan as part of a plan to raise common debt to finance Ukraine's defense against Russia, Politico reports, citing senior European Commission officials, writes UNN.
Details
The new plan will provide Ukraine with 45 billion euros next year. The remaining funds will be paid in 2027. The plan will include anti-corruption guarantees and a plan for how much money should be spent on Ukraine's military and budgetary needs.
The new plan will not be cheap. The EU is expected to pay 3 billion euros annually in interest from 2028 through its seven-year budget, which is largely funded by EU governments, senior European Commission officials told reporters on Friday. Interest payments will begin in 2027 but will only cost 1 billion euros that year.
Ukraine will only have to repay the loan after Russia ends the war and pays war reparations. This seems unlikely, meaning the EU could constantly roll over the debt or use frozen Russian assets to repay it. This would require another political agreement between EU leaders, as Belgium strongly opposes the use of frozen assets, most of which are held in the Brussels financial depository Euroclear.
It was Belgium's resistance that ultimately forced leaders to choose the common debt option. Belgian Prime Minister Bart De Wever wanted unlimited financial guarantees on the Russian loan, secured by assets, which was too big a demand for his colleagues.
The Czech Republic, Hungary, and Slovakia will not join the other 24 countries of the bloc in sharing the debt burden, but have agreed not to hinder Ukraine's financial needs. As part of the agreement, the European Commission will reportedly propose so-called enhanced cooperation early next week, which will provide the 24 countries with a legal platform for raising common debt.
Addition
The European Council decided to allocate 90 billion euros in funding to Ukraine for 2026-2027. The funds will be based on EU borrowing without the use of Russian assets and without the involvement of the Czech Republic, Hungary, and Slovakia.