EU Faces Financial Hurdle in Supporting Ukraine Amid Delayed Loan Plan

The European Union (EU) faces a pressing challenge as delays in reaching an agreement on a loan using immobilised Russian assets threaten to hinder financial support for Ukraine in 2026. European Economic Commissioner Valdis Dombrovskis has highlighted the issue, suggesting that a bridging solution may be necessary in early 2026 should obstacles persist.

The proposed loan, aimed at accumulating funds from Russian central bank assets immobilised primarily in Belgium's Euroclear securities depository, seeks to finance Ukraine in 2026 and 2027. However, Belgium's demands for guarantees from other EU governments and concerns over potential legal repercussions have stalled progress.

With Ukraine's financial needs estimated to reach 130 billion euros by 2026-2027, prompt EU action is crucial. The Commission's Reparations Loan could address these needs but requires swift endorsement. Failure to develop a fallback plan risks leaving Ukraine unsupported as it contends with ongoing military and economic challenges.