EU Seeks New Joint Borrowing for Ukraine as Germany and Belgium Oppose Using Frozen Russian Assets
The European Commission and several EU states are seeking support for new joint borrowing that could provide Ukraine with about €45 billion in additional financing. The proposal comes as Germany opposes broader use of frozen Russian assets and warns that it may withhold support for the EU's 2028–2034 budget unless all member states share the cost of supporting Ukraine.
Key points
- A new joint borrowing mechanism could provide Ukraine with about €45 billion in additional financing.
- Ukraine's budget deficit could reach about €70 billion in 2027.
- EU leaders agreed at the end of 2025 to provide a €90 billion loan for Ukraine's 2026–2027 funding needs.
- Czechia, Hungary and Slovakia declined to guarantee the €90 billion loan.
- Germany opposes new common borrowing but is prepared to support the existing €90 billion arrangement.
- Belgium and Germany oppose broader use of frozen Russian assets, while other EU states support using them for Ukraine.
- Friedrich Merz said Germany may withhold support for the EU's 2028–2034 budget unless every member state contributes to supporting Ukraine.
Why it matters
The new borrowing could cover roughly two-thirds of Ukraine's expected €70 billion budget deficit in 2027, with international partners expected to provide the remainder. The negotiations also determine how financial risks will be shared among EU member states. Germany's position could affect approval of the EU's multiannual budget for 2028–2034, while the dispute over frozen Russian assets remains unresolved.
What happened
The European Commission and several EU countries intensified efforts to secure support for new common borrowing to finance Ukraine. One of the main options under consideration is a loan backed by common EU debt, which could provide an additional €45 billion. This would come on top of the €90 billion Ukraine Support Loan agreed at the end of 2025 to cover Ukraine's needs in 2026 and 2027. The previous loan was raised on capital markets under guarantees from the EU's common budget, with its financial backing coming from the EU rather than frozen Russian assets.
How Ukrainian sources describe it
Ukrainian coverage focuses on the amount potentially available to Ukraine, the coverage of the budget deficit and preserving frozen Russian assets for reparations. It also highlights the European Commission's more optimistic assessment of Ukraine's anti-corruption progress, reforms and relations with Hungary. Ukraine and Hungary have made significant progress in their bilateral relations, and Ukraine opened two clusters after changing legislation on the educational rights of national minorities.
How international sources describe it
International coverage emphasizes Friedrich Merz's call for every EU member state to contribute to financing Ukraine and to treat support for Ukraine as part of European collective security. It also focuses on his warning that Germany could block the EU's multiannual budget for 2028–2034 if the costs are not shared.
Where reporting differs
Belgium and Germany oppose broader use of frozen Russian assets, while a group of EU states wants them used to cover Ukraine's additional financial needs. Belgium says it cannot alone bear possible Russian lawsuits or compensation claims, while Brussels wants reliable guarantees to spread those risks among EU countries. Germany is negative toward new common borrowing but is ready to support the current €90 billion loan, while simultaneously demanding participation by every member state and warning that it may block the multiannual budget.
Background
At the end of 2025, EU leaders agreed on the €90 billion Ukraine Support Loan for Ukraine's funding needs in 2026 and 2027. The funds are raised on capital markets under guarantees from the EU's common budget. Czechia, Hungary and Slovakia did not participate in guaranteeing the loan. Belgium previously blocked a proposal to use part of roughly €210 billion in frozen Russian sovereign assets held at Euroclear. The Commission has also proposed a roadmap for Ukraine and a working group to monitor intermediate benchmarks in the Fundamentals cluster.