EU countries seek urgent plan B to fund Ukraine
Officials are looking at an EU bridging loan to help Kyiv stay afloat if they can’t agree on using Moscow’s frozen state assets in time.
November 26, 2025 4:12 am CET
By Tim Ross, Gregorio Sorgi and Bjarke Smith-Meyer
BRUSSELS — European countries are working on an emergency plan B to stop Ukraine running out of money early next year in case they cannot reach a deal on raiding Russia’s frozen assets to fund Kyiv’s war effort.
At a summit a month ago European Union leaders hoped to agree on a proposal to use Moscow’s immobilized reserves for a €140 billion “reparations loan” to Ukraine but the idea ran into fierce opposition from Bart De Wever, the prime minister of Belgium, where the money is held.
Now, with peace talks intensifying, and Kyiv running short of cash, the question of what to do with the Russian assets has taken on a new urgency. “If we don’t move, others will move before us,” said one EU official, granted anonymity like others cited here, to speak freely.
European officials suggested Donald Trump’s new peace drive could help solidify support for the plan to use the frozen funds for a reparations loan. The cash would only become repayable to Moscow in the unlikely future scenario that Russia agrees to pay war damages, under the plan.
EU diplomats expect European Commission President Ursula von der Leyen to order her officials to present a draft legal text on the reparations loan within days as momentum grows for a solution. “The next step is now that the Commission is ready to present a legal text,” von der Leyen told lawmakers in Strasbourg on Wednesday, without specifying when the document would be put forward.
But despite intensive talks between Belgium and Commission in recent weeks, De Wever still has concerns about legal liabilities and the risk of retaliation from Moscow if the Russian funds were used for the loan.
So policy specialists in Brussels are now turning to how to help Ukraine in the event that the reparations loan proposal does not come together in time for EU leaders to sign off on it at a summit on Dec. 18.
One option gaining support is for a “bridging” loan, financed by EU borrowing, to keep Ukraine afloat during the first months of 2026, according to four officials. That would allow more time to set up the full reparations loan using the Russian assets in a way that Belgium can live with, to provide a longer term solution.
Two diplomats said Ukraine could be asked to repay the initial bridging loan to the EU, once it has received funding from the long-term reparations loan. Another possibility would be a long-term solution involving a combination of the reparation loan and joint EU borrowing.
“I cannot see any scenario in which the European taxpayers alone will pay the bill,” von der Leyen told lawmakers on Wednesday.
EU countries' envoys discussed the options with the European Commission at a meeting in Brussels on Tuesday. Countries including France, Germany, the Netherlands, Lithuania and Luxembourg all pushed the Commission to make progress on proposals to finance Ukraine, according to one official briefed on the discussion.
The prospect of a bridge financing model had been raised on Nov. 4 by EU Economy Commissioner Valdis Dombrovskis, who noted: "The longer we now run delays, the more challenging it will become."
Urgency
The Commission is acutely aware of the need to get a solution in place urgently, with Kyiv warning it faces running out of money in the first few months of next year.
On Tuesday, French President Emmanuel Macron said EU allies will finalize "in the coming days" a solution that will "secure funding" and "give visibility to Ukraine."
In the longer term, the reparations loan is widely seen as the only game in town. There is no appetite among EU member countries to dip into their own national budgets to send cash grants to Ukraine. Many are already struggling with budget deficits and high borrowing costs. Persuading the Belgians to come on board ultimately is therefore seen as key.
“We hope to be able to solve their hesitation,” one EU diplomat said. “We really do not see any other possible option than the reparations loan.” One idea would be to “combine the reparations loan option with one of the other options” the diplomat said. But this must “not take too much time because of course there’s a sense of urgency now and it’s pressing.”
There are still problems with creating a bridging loan using joint EU borrowing, which some commentators have described as “eurobonds” though others dislike the term.
Perhaps the biggest obstacle will be that this kind of EU borrowing would require unanimous support from the bloc’s 27 member countries and Hungary has long opposed new measures to help finance Ukraine’s war effort.
It is possible, however, that casting the bridging loan as designed for Ukraine’s reconstruction, rather than for funding its war machine, would help.
Another factor will be the renewed momentum for a peace deal as Trump’s team seeks to push officials from Ukraine and Russia closer to agreeing terms. The evolving drafts of a peace proposal refer to using the frozen assets to fund Ukraine’s reconstruction. European officials reacted with dismay last week to the idea contained in the original American draft for the U.S. to profit from the use of these assets.
EU leaders are now hopeful that they have convinced Trump’s team that they must have the final say over what happens to these assets, as well as over the timing of European sanctions on Russia being lifted and on Ukraine’s path toward membership of the EU, diplomats said.
Clea Caulcutt and Esther Webber contributed reporting. This article has been updated.
Officials are looking at an EU bridging loan to help Kyiv stay afloat if they can’t agree on using Moscow’s frozen state assets in time.
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