The European Commission is considering covering Ukraine's funding deficit with funds raised from joint EU debt and bilateral grants from member states, citing three sources familiar with the situation, Euractiv reports, writes UNN.
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These two options, which will be outlined in the European Commission's "options paper" for Ukraine, to be circulated to capitals in the coming weeks, complement the so-called "reparations loan" option, the publication writes.
The latest proposal involves using immobilized Russian sovereign assets worth 140 billion euros, held at the Brussels-based clearing company Euroclear, for Ukraine.
The "reparations loan" is the preferred option for supporting Ukraine, despite Belgium's refusal to support the scheme at the EU leaders' summit in Brussels in October, sources said.
Many EU member states, including Germany and the Baltic states, share this view.
Belgium managed to soften the conclusions of the EU Council last month, as a result of which the European Commission was instructed to develop "options" to support Ukraine's financial needs, which did not specifically mention the use of Russian assets frozen after Russia's full-scale invasion of Ukraine in 2022.
Belgian Prime Minister Bart De Wever pledged to block the "reparations loan" scheme unless other member states shared the legal and financial risks associated with the loan, and other EU countries did not use Russian sovereign assets in their jurisdictions, alongside Belgium.
The European Commission estimates that there are 25 billion euros of Russian sovereign assets in the EU outside Belgium. Germany, France, and Luxembourg are also believed to hold some of these assets.
De Wever also floated the idea of using joint debt to support Ukraine after last month's EU Council meeting.
The possibility of joint borrowing described in the European Commission document would not be aimed at securing a loan from the EU's own long-term budget, as there are insufficient free funds for this, sources familiar with the situation said.
The options document is still under review and may change, they added.
The International Monetary Fund estimates Ukraine's budget deficit at approximately $65 billion (55 billion euros) for 2026 and 2027. The European Commission's own estimates are based on IMF assessments.
According to sources, the European Commission and Belgian officials plan to hold technical talks on the reparations loan on Friday.
High-level political talks are not yet planned, but may take place in the near future.
The next meeting of EU leaders is scheduled to take place in Brussels on December 18-19.