EU's Financial Dilemma: Funding Ukraine Amidst Frozen Russian Assets

Ursula von der Leyen outlines three financial options for EU's aid to Ukraine, including utilizing frozen Russian assets for loans. The EU must promptly agree on funding plans, as decisions are due by December. The aim is to bridge financial gaps until a new long-term budget is in place by 2028.

European Commission President Ursula von der Leyen has unveiled three options to financially support Ukraine. This includes a potential loan from frozen Russian assets as part of a larger aid strategy. EU leaders endorsed meeting Ukraine's financial needs but hesitated over the asset-based loan due to Belgian concerns.

The European Union, minus Hungary, urged the Commission to draft financial support strategies. The options include grants from member states, EU market-based borrowing, or leveraging immobilized assets. Von der Leyen highlighted these approaches are flexible and can be sequentially utilized to meet Ukraine's urgent needs by mid-2026.

Ukraine's financial shortfall for 2026-2027 is estimated at 135.7 billion euros. The proposals, if incorporating Russian assets, could cover these needs with a 140 billion euro loan. Von der Leyen stressed the necessity of a rapid consensus at the upcoming December European Council, while feedback in Brussels remains mixed regarding the Commission's proposals.

(With inputs from agencies.)