The EU is seeking another €70 billion to support Ukraine’s military efforts in 2027, but rising borrowing costs and disputes surrounding Russian assets leave Brussels with "few easy options." Euronews reports, writes UNN.
Details
"The EU is urgently seeking an additional €70 billion for Ukraine next year, as the intensification of Russia’s attack on the country and its economy has made the bloc’s existing financial-support plans insufficient," the publication says.
At the conclusion of last week’s two-day summit, EU leaders heard from Ukrainian President Volodymyr Zelenskyy, who told them about the scale of the shortfall, saying that "the war will cost €155 billion next year. And we need at least another €70 billion from you: for defense, weapons, and strengthening our resilience."
"The appeal resonated. EU leaders instructed the European Commission to explore ways to close this gap, which turned out to be significantly larger than Brussels had expected," the publication says.
Until now, the bloc’s support had been based on a €90 billion loan that leaders approved in December last year. It was intended to cover two-thirds of Ukraine’s financial and military needs in 2026 and 2027, while the remaining third was to be provided by other allies. At the same time, the European Commission had assumed that the war would end in 2026. Instead, Moscow intensified its offensive, including daytime strikes aimed at undermining Ukraine’s already fragile economy, the publication writes.
"Kyiv has been warning for several weeks that next year it will need an additional $32.6 billion to support the budget and $45 billion for the armed forces – just $78 billion, or approximately €70 billion," the publication notes.
"At first, Brussels refrained from commenting on this staggering sum. But after several rounds of technical discussions, the estimate was accepted, and the EU concluded that the money must be found if Ukraine is to sustain its military efforts. The €70 billion is intended to supplement the €45 billion that the EU plans to allocate under the already agreed loan, as well as several billion euros from other programs," the publication says.
"Confronted with a growing bill," as the publication puts it, Brussels was quick to stress that the €70 billion would be a "joint effort" with other allies, such as the United Kingdom, Norway, Canada, and Japan.
"We have always said that we cannot go down this path alone. We cannot do everything ourselves. Therefore, our partners overall must step up their efforts," a European Commission representative said. "They must come forward with promises and fulfill their commitments. This is very important."
"It is not yet clear what share of the €70 billion the EU itself will provide, given that the former two-thirds-to-one-third cost-sharing arrangement did not work. Nor is it clear how quickly Kyiv will need the funds. Only one thing is clear: the opportunities to raise such a huge sum in a short period are extremely limited," the publication says.
Additional pressure, it is noted, is also created by the fact that the high-stakes negotiations will take place in parallel with a fierce battle over the next long-term budget and an election campaign in France, where frontrunner Marine Le Pen is promising to halt financial aid to Ukraine.
Going to the markets
According to estimates by diplomats and officials, "the most likely option at present appears to be the issuance of new joint EU debt on financial markets, as Brussels is already doing for the €90 billion loan." The European Commission could reportedly expand the existing credit line, effectively extending the current financing scheme.
The bloc, which has a stable AAA credit rating, became a sought-after bond issuer after the COVID-19 pandemic: its auctions are often oversubscribed. Former Italian Prime Minister and ECB President Mario Draghi is calling for large-scale borrowing.
However, since December, when leaders approved the loan, the financial situation has deteriorated sharply. Borrowing costs have surged worldwide amid a spike in oil prices, rising public debt, and strong demand for investment in artificial intelligence.
European countries were particularly hard hit, especially those already burdened by debt. Belgium is now borrowing at rates comparable to Greece’s, while France is paying more on its borrowings than Italy.
This makes the prospect of new debt politically sensitive, and at times almost impossible, as it would increase the already growing burden of interest payments, the publication notes.
The yield on the bloc’s 10-year bonds rose from 2.8% in January to 3.44% in September — a noticeable increase, though less sharp than in many other markets.
"This dynamic affects all issuers around the world, and our relative position has not fundamentally deteriorated," a European Commission representative said.
"We remain an extremely competitive issuer," he added.
If joint borrowing becomes the main option, the publication writes, "a number of countries are expected to refuse to participate."
Hungary, Slovakia and the Czech Republic are no longer participating in the €90 billion loan. At last week’s summit, Slovak Prime Minister Robert Fico said that, together with his Hungarian counterpart, Péter Magyar, they had agreed to maintain this position. "If other countries want to give Ukraine a loan, they can do so, but at least two countries are already making it clear that we will not participate in this financial mechanism," Fico said. "We are showing solidarity in other ways."
Another country that is likely to stay on the sidelines is Bulgaria, whose new prime minister, Rumen Radev, has repeatedly criticized the bloc’s military aid to Ukraine, the publication writes.
Use of frozen Russian assets
In recent weeks, the publication notes, "several countries have proposed an alternative way to provide Ukraine with long-term financial resources — using €210 billion in frozen assets of Russia’s central bank held within the bloc." "Sweden, the Netherlands, Spain and Poland revived the discussion in August. Since then, the Scandinavian and Baltic countries, Germany and Ireland have expressed their support," the article says.
These are precisely the states that, as noted, advocated most actively last year for directing the assets into an interest-free loan for Ukraine. For the most part, the publication writes, they are Ukraine’s largest bilateral donors, who see the assets as a way to ensure a genuine sharing of the burden.
The plan failed when it encountered strong opposition from Belgium, where €185 billion of these assets are held at the Euroclear depository in central Brussels. Belgian Prime Minister Bart De Wever warned that using the assets would amount to confiscation and lead to catastrophic consequences for the country. He demanded full mutual liability for the risks, along with unlimited guarantees covering all possible obligations. EU leaders recoiled from the prospect of potentially having to bail out Belgium’s banking system and, at the last moment, chose the joint-debt option to establish a €90 billion loan.
Despite this failure, supporters of using Russian assets have not abandoned the idea. Ukraine is constantly bringing the issue back onto the discussion agenda, the publication notes.
"Zelenskyy said that if Europe does not use them, Russia will try to get them back. (According to media reports, the United States proposed partially unfreezing the assets as an incentive for Russia to participate in peace negotiations, but the Europeans rejected the plan.)" the article says.
De Wever, "as before, remains firmly opposed. Euronews learned that during the summit, the Belgian prime minister took the floor on his own initiative and told his counterparts that his objections had not changed. He insisted that the money must remain securely blocked until the end of the war to prevent outside interference from Moscow or Washington.
"The message was understood. According to officials and diplomats, summit participants left with the feeling that the idea of using the assets had little chance of succeeding this time as well. The failure of last year’s plan is still fresh in their memories. France and Italy, whose support would be crucial, are still considered unready to use the assets. Belgium’s position has become even tougher. It opposes not only the use of sovereign funds but also their transfer from Euroclear to an EU-owned custodian—a legal workaround that some have proposed to break the deadlock," the publication notes.
"This issue will keep coming up again and again. Ultimately, a solution will probably be found. I don’t think it will be on the agenda in the short term—not this month or next month," EU Ambassador to Ukraine Katarina Mathernova told Euronews. "As long as the assets remain frozen, are in Europe, under our regime and now under European jurisdiction, they will undoubtedly be the subject of discussion among leaders in the future. And I think that discussion will take place, but not in the immediate future."
The EU supports Ukraine but has not found €70 billion for 202716.10.26, 23:55