The European Commission unveiled on Wednesday a bold proposal to fund $105 billion (€90 billion) in support for Ukraine’s 2026–2027 war effort using frozen Russian assets or EU borrowing.
The plan offers two options:
- Preferred: Reparations loan backed by €140 billion ($163 billion) in seized Russian central bank reserves held mainly by Belgium’s Euroclear
- Alternative: EU market borrowing (requires unanimous approval)
Commission President Ursula von der Leyen said the scheme covers two-thirds of Ukraine’s needs, with the rest from international partners: “We increase the cost of Russia’s war of aggression and incentivise Moscow to negotiate from a position of weakness.”
The reparations loan does not confiscate funds; Ukraine repays only if Russia pays war reparations. It includes safeguards for legal costs from Russian lawsuits.
Belgium’s objections persist
Belgium, holding most assets, remains the biggest critic.
Foreign Minister Maxime Prévot said the texts “do not address our concerns satisfactorily” and called the reparations loan the “worst option” due to unprecedented risks and potential 50-year litigation from Russia.
Brussels demands EU countries cover all future legal fees. Von der Leyen claimed the plan addresses “almost all” Belgian worries and extends to other holders like France, Germany, Sweden and Cyprus.
The EU needs 15 of 27 members to approve; a leaders’ summit on 18 December could seal it.
US backing, Russian threats
US Treasury Secretary Scott Bessent “positively received” the proposal, despite Trump’s 28-point plan suggesting a joint US-Russian investment vehicle for some assets.
Russia calls it “theft”. VTB bank head Andrei Kostin warned of “50 years of litigation” if implemented.
Broader EU energy moves
The Commission also secured agreement to phase out Russian gas by late 2027: LNG imports end 2026, pipeline gas by autumn 2027. Von der Leyen hailed it as “Europe’s full energy independence from Russia”, depleting Putin’s war chest.
Hungary and Slovakia – still dependent on Russian supplies – plan legal challenges, fearing economic damage from costlier alternatives.
Source/Featured photo: AlJazeera
Also read: Putin accepts some Trump proposals, rejects land concessions
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