€90bn loan for Ukraine is enough for now, Brussels says amid doubts

The European Commission is reluctant to reopen the sensitive debate on financial support for Ukraine, despite growing doubts about whether the €90 billion loan agreed by leaders last year will last until the end of 2027, as originally conceived.

Brussels intends to disburse €45 billion this year and €45 billion next year. So far, €3.2 billion in budgetary aid and €8.35 billion in military aid have been paid out.

“In terms of longevity, that is what is foreseen: that this €90 billion loan should be disbursed (over) the two years,” Paula Pinho, the Commission’s chief spokesperson, said on Tuesday in response to a Euronews question.

“It’s important to remember that these disbursements are also linked to the reforms that are being introduced in Ukraine, and this is, of course, a critical aspect,” she added.

“We are focused now on what is already a very ambitious disbursement plan, and for the moment that’s where our focus lies.”

Russia’s escalation, however, is rapidly adding to the bill.

Moscow has launched a new tactic of non-stop drone attacks aimed at disrupting daily economic activity and sowing terror among civilians. At the same time, it is ramping up strikes of ballistic missiles on critical infrastructure ahead of the winter season.

Ukrainian President Volodymyr Zelenskyy has asked allies to plug a €23 billion gap in the Ministry of Defence to pay for weapons and remain “competitive” in deep strikes.

“We need more money, much more,” Zelenskyy said last week.

As a solution, Zelenskyy suggested the EU front-load a share of the €45 billion earmarked for next year, which would mean having less money available in 2027.

The Commission has not yet received a formal request from Kyiv in that regard.

Member states discussed the matter on Tuesday during an informal ministerial meeting in Ireland, where support for Ukraine topped the agenda.

At the end of the talks, Irish Foreign Minister Helen McEntee said there was “consensus across the room” to “bring forward funding” under the ongoing loan. But she admitted the question required further deliberations in Brussels.

Back to the assets?

In the meantime, Sweden, the Netherlands, Spain and Poland have revived the idea of tapping into the immbolised assets of the Russian Central Bank to provide additional support for Ukraine, warning the €90 billion loan “will not be enough”.

The EU holds €210 billion of these assets, sanctioned since February 2022.

“What we see is that Ukraine needs more support and, to be honest, we’re not providing enough support bilaterally and through the EU, and then what is left is the frozen assets,” Swedish Foreign Minister Maria Malmer Stenergard told Euronews.

“This is what is fair to Ukraine, it’s what is fair to taxpayers,” she added.

The Commission is treading carefully on the divisive issue.

Last year, the executive threw its weight fully behind an inventive proposal to turn the Russian assets into a financial lifeline for Ukraine. But the plan soon met fierce opposition from Belgium, which holds the majority of the €210 billion.

It eventually fell apart at a make-or-break summit in December, when leaders opted instead for joint debt to finance a €90 billion loan.

Officials in the Commission have never abandoned the idea of tapping the Russian assets but are mindful of tabling a new proposal without a guarantee of success. Capitals are already ensnared in fraught negotiations over the next EU budget.

Instead, Brussels is turning up the pressure on Western allies, who are expected to complement the loan by covering one-third of Ukraine’s needs.

“There is one-third which cannot be covered by the EU and where we have been urging our partners to come in and step in,” Pinho, the spokesperson, said.

Last month, Norway, a major non-EU donor, pledged 85 billion krone (€7.86 billion) for Ukraine in 2027, matching the amount allocated this year.

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