Von der Leyen presents two proposals for Ukraine's funding in 2026-2027, EU borrowing and reparation loan

BRUSSELS. Dec 3 (Interfax) - European Commission President Ursula von der Leyen presented on Wednesday two solutions for supporting Ukraine's financial needs in 2026-2027.

"We are putting forward solutions to help cover Ukraine's financial needs for the next two years, support the State budget and strengthen its defense industry as well as its integration into the European defense industrial base," von der Leyen said at a press conference in Brussels.

These two solutions are the European Union's borrowing and a reparation loan, "which would empower the Commission to borrow cash balances from EU financial institutions holding immobilized Russian Central Bank assets," she said. "These two solutions are underpinned by a comprehensive set of five legal proposals," she said.

The European Commission's 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," von der Leyen said.

Von der Leyen explained the contents of both options. According to the International Monetary Fund's estimates, Ukraine needs 135 billion euros for 2026-2027, she said. "Today we are proposing to cover two thirds of Ukraine's financing needs for the next two years. This is 90 billion euros. The remainder would be for international partners to cover," she said.

The first solution envisages borrowing from the capital market, and the EU's budget would serve as the loan guarantee. These funds would be handed over to Ukraine as a loan, she said. Such solution should be adopted by a unanimous decision of the EU member states, she said.

The European Commission's second legislative proposal is a reparation loan. It refers to Russia's immobilized assets in the EU. Such solution envisages using Russia's frozen assets in all of the EU's financial institutions holding them. These funds would be transferred to Ukraine as a loan. "And Ukraine has to pay back this loan if and when Russia is paying reparations. This solution can be established by qualified majority voting," von der Leyen said.

The EU summit will consider these proposals on December 18-19.