Ukraine’s European allies explore reparation loans from frozen Russian assets, avoiding confiscation.To address its budget and military needs in 2026 and 2027, Ukraine requires approximately €133 billion to prevent a “collapse” in its war efforts against Russia, an EU official told EUalive’s partner European Pravda on condition of anonymity.
The European Union is exploring options to provide Kyiv with these funds, notably through “reparation loans” based on frozen Russian assets.
The official explained, “To withstand aggression, Ukraine needs substantial resources. According to preliminary IMF estimates, in addition to significant military aid, Ukraine requires about €52–53 billion in budget support for 2026–2027.”
Estimating military needs is more complex, the official noted: “In wartime, military support could amount to $60 billion per year, and in peacetime, about $25 billion. Depending on the conflict’s developments, these costs could reach $80 billion over two years, on top of the €53 billion for budget support.”
In total, Ukraine’s external support needs for 2026–27 could reach €133 billion.
“If this support is not provided, it will likely lead to Ukraine’s collapse, creating a serious security threat to all of Europe,” the official emphasized.
Noting a shift in U.S. policy, the official added: “We can no longer count on significant contributions from the American side.”
Consequently, the EU is revisiting frozen Russian assets. “We have returned to the issue of Russian frozen assets and seem to have found a viable approach,” the official said.
“The European Commission has no finalized proposal yet, but this is explicitly not about confiscation.”
The plan aligns with European Commission President Ursula von der Leyen’s proposal for “reparation loans” tied to these assets, based on the European Council’s October 17, 2024, decision to keep Russian assets frozen until Russia ends its war and compensates for damages.
The official reported ongoing negotiations with EU member states and external partners on the “reparation loans” concept, with a specific proposal expected after the European Council meeting in Brussels on 23-24 October.
German Chancellor Friedrich Merz indicated that a decision on using frozen Russian assets could be made this month.
EU Commission chief Ursula Von der Leyen has acknowledged hesitation among some EU member states, though Germany, Sweden, and Finland support the idea.
Copenhagen also considers it feasible despite legal complexities. Belgian Prime Minister Bart De Wever has requested guarantees from EU leaders to share risks, as many frozen Russian assets are held in Belgium. Hungary, however, opposes using these assets for Ukraine’s “reparation loans.”