As Russia escalates, EU realises its Ukraine support won’t be enough

The European Union is rapidly coming to terms with the limitations of its multibillion-euro support for Ukraine, as Russia’s all-out escalation wrecks the country’s finances, depletes its air defences and deepens its reliance on cash-strapped donors.

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“This war will last longer than we thought,” a European diplomat said, speaking on condition of anonymity. “There’s a realisation that needs will continue to present themselves, but it’s not yet clear how this will be addressed.”

“We must send a clear message that the EU won’t change its position and will double down on its support for Ukraine and pressure on Russia,” another diplomat said.

Railways, bridges, cargo vessels, power stations, data centres, warehouses, medical centres, schools and kindergartens have all come under Russian airstrikes in recent days. Even the National Academy of Sciences has been targeted.

The relentless bombardment, a calculated mix of ballistic missiles and jet-powered drones, has killed scores of civilians, including over 30 people in Kramatorsk after a glide bomb attack set two public buses ablaze.

On Thursday, Russia plunged Kyiv into darkness, offering a grim preview of a winter that is likely to be the harshest, cruellest yet of the war.

This is “terror against people and life. And it is important that leaders do not ignore what is happening”, Ukrainian President Volodymyr Zelenskyy said.

“Pure and simple: these are war crimes,” European Commission President Ursula von der Leyen said, expressing her solidarity.

The escalation has hit the country’s war-battered economy particularly hard, as the endless waves of drones disrupt ordinary activity, force businesses to close, raise material costs and eat away at profits.

Russia’s blockade in the Black Sea has added further strain, preventing Ukrainian farmers from selling tonnes of grain to their global clients and depriving the state of an essential source of revenue.

The deterioration raises serious questions about the viability and durability of the EU’s multiple support programmes, notably the €90 billion loan that leaders agreed last year to cover two-thirds of Ukraine’s needs for 2026 and 2027.

The loan, it must be noted, was designed under the premise that the war would end sometime this year. Russia’s escalation all but guarantees this will not be the case.

Ukraine’s Finance Minister Sergii Marchenko has warned that the 2027 budget will be the most complicated since the start of the full-scale invasion. He has urged international donors to fill a staggering $78 billion (€70 billion) gap.

The Commission has refrained from endorsing the headline figure, which vastly exceeds the €45 billion it plans to provide next year under the support loan. Instead, it has promised to speed up disbursements, contingent on internal reforms.

“For 2027, the picture is indeed more challenging,” Economy Commissioner Valdis Dombrovskis said on Friday after a meeting of finance ministers.

“It’s clear that we are facing a sizeable funding gap. The exact quantification is still a work in progress.”

Brussels has not formally reopened the debate on new support for Ukraine, as member states are currently embroiled in bitter negotiations over the next EU budget.

Officials and diplomats, however, privately admit it is only a matter of time before leaders are compelled to address the matter, which has become increasingly contentious amid rising debt, stagnant growth and far-right opposition.

The total absence of US aid, once a key provider of weapons, compounds the equation.

A group of EU countries has attempted to revive the debate on the immobilised Russian assets, arguing the €90 billion loan “will not be enough”.

But Belgium, the main custodian of the assets, has pushed back. France and Italy, two key votes, remain reluctant to go down the uncharted avenue.

“On the assets, there’s still some interest, but we still remember very clearly what happened in December,” a senior diplomat said, referring to the dramatic summit where an asset-backed proposal fell apart. The loan was then set up as Plan B.

“As of now, there’s nothing new or substantial on the table.”

The option of issuing more joint debt to support Ukraine, as done with the €90 billion, has become politically unattractive amid spiralling borrowing costs.

Meanwhile, the option of ramping up bilateral contributions, which is much more straightforward, risks placing the burden on a few wealthy countries, namely Germany, the Netherlands and the Nordics.

With no easy solutions, Brussels is asking other allies, such as the UK, Canada and Japan, to step up to the plate as it figures out what to do next.

“We are assessing other possibilities in any case,” Dombrovskis said. “We are committed to ensuring that Ukraine has the necessary funding for as long as it’s necessary.”