European Commission develops three 2026-27 financing options for Ukraine

The European Commission has proposed three options for providing financial assistance to Ukraine over the next two years: bilateral grants, a loan backed by the EU through borrowing on financial markets, and a loan backed by frozen Russian assets.

The European Commission has finally presented EU member states with three options for financing Ukraine in 2026-27.

"Based on these guiding principles, we have identified three main options, i.e. support to be financed by member states via grants, a limited recourse loan funded by the Union borrowing on the financial markets, or a limited recourse loan linked to the cash balances of immobilised assets," the letter from European Commission President Ursula von der Leyen reads.

Von der Leyen called on EU member states to "rapidly reach a clear commitment on how to ensure that the necessary financing for Ukraine will be agreed at the next European Council meeting in December".

"Taking this forward will allow us to maintain pressure on Russia, deny it the hope of victory, and lay the foundations for the suspension of hostilities and the groundwork for long-awaited peace negotiations," von der Leyen said.

The European Commission has planned financial assistance for Ukraine for 2026 and 2027 with the assumption that Russia's war against Ukraine will end in late 2026.

According to the European Commission's estimates, Ukraine will need more than €71 billion in external financing in 2026, of which over €51 billion will be directed towards military needs.

The EU's plan for a reparations loan for Ukraine has stalled due to objections from Belgium, where the bulk of Russian assets in the EU are held, and which fears legal consequences from such a decision.

EU representatives stress that the issue of using Russia's frozen assets to financially support Ukraine remains on the agenda, and a final decision will be taken in December 2025.