European Commission unveils two solutions to support Ukraine's financing needs in 2026-2027

To bolster Ukraine's financial resilience amidst the ongoing war with Russia, the European Commission today proposes two solutions to address Ukraine's financing needs for 2026-2027: EU borrowing and a Reparations Loan, Report informs, citing the Commission.

"These two solutions are underpinned by a comprehensive set of five legal proposals. With Russia continuing to show no sign of willingness to commit to a just and sustainable peace, the strain on Ukraine's resources continues to grow, making sustained EU support all the more vital.

The proposed solutions mark a pivotal step in responding to the European Council's commitment to address Ukraine's future budgetary and defence needs on October 23, 2025. The proposals build on the options presented by President von der Leyen on November 17, 2025 following the call by the European Council for the Commission to present options for financial support to Ukraine and further discussions with Member States.

The package is designed to respond to Ukraine's evolving financing needs in a flexible and effective manner, irrespective of the situation on the ground, whether the country is at war or at peace. It comes as Russia"s attacks against Ukraine and its infrastructure increase intensively, alongside rising hybrid warfare attacks across EU Member States and incursions of EU and NATO airspace," reads the message.

These proposals put in place a number of safeguards to protect Member States and financial institutions from possible retaliation measures within Russia, and from unlawful expropriations outside Russia, notably in Russia-friendly jurisdictions. To cover any residual risk, the package includes a strong mechanism of solidarity backed by bilateral national guarantees or the EU budget. While the proposals comply fully with European and international law, they also maintain the integrity of the Union's financial market and the euro's status as a global currency.

The package consists of: a proposed Regulation to establish a Reparations Loan; a proposal to prohibit any transfer of immobilised Russian Central Bank assets back to Russia; two proposals that put in place important safeguards for the Reparations Loan, designed to protect EU Member States and financial institutions from possible retaliation measures.

Ursula von der Leyen, President of the European Commission said: "With today's proposals, we will ensure Ukraine has the means to defend themselves and take forward peace negotiations from a position of strength. We are putting forward solutions to help cover Ukraine's financial needs for the next two years, support the State budget and strengthen its defence industry as well as its integration into the European defence industrial base. We are proposing to create a Reparations Loan, using the cash balances from immobilised Russian assets in the EU, with strong safeguards for our Member States. We are increasing the cost of Russia's war of aggression. And this should act as a further incentive for Russia to engage at the negotiating table."