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Loans and guarantees, how to bypass Bce and Belgio

by AI | 05.Dec 2025 | Europe in brief AI

The European Union puts two ways on the table to finance Kiev. The first involves the use of Russian assets, the second is to give Ukraine loans charged to the EU’s multiannual budget.

The Belgian Prime Minister Bart De Wever and the President of the European Commission Ursula von der Leyen. Photo: Belga/Eric Lalmand

Brussels (ANSA) – The European Union is putting two ways to finance Kiev on the table. The first involves the use of Russian assets. The money frozen in Europe would be used to issue eurobonds to finance Ukraine. A mechanism that is now known as the ‘Reparation loan’ and that would be repaid once the conflict is over if ‘war reparations’ were to come from Russia.

The second way seems apparently easier, and is simply to give Ukraine loans charged to the EU’s multiannual budget. The paradox is that the more intricate mechanism is actually the silver bullet: it does indeed need to be ‘shielded’ by unassailable guarantees, but it does not entail new debt and can be approved by qualified majority, thus bypassing the predictable vetoes of Belgium and Hungary.

Conversely, loans financed with the margins of the Financial Framework, modeled on the Sure loan during Covid, instead require unanimity. There is also a third option, that of asking the ECB to act as ‘lender of last resort’, but it was ruled out from the start because it would have violated the Treaty, which prevents the central bank from directly financing States or Union budget operations.

Turning to the figures: Brussels says today it wants to cover two thirds of Ukraine’s needs, estimated by the International Monetary Fund at 135 billion for 2026-2027, declaring itself ready to give Ukraine 90 billion for essential services and military capabilities. However, the Reparation loan mechanism has a potential value of up to 210 billion.

Subtracting the Era loans of 45 billion already ‘deployed’ under the Italian presidency of the G7, the figure falls to 165 billion. This is one of the new elements of the proposal, since it does not only envisage using the cash balances of Russian assets held at the Belgian securities depository Euroclear, but also another 25 billion on the books of European commercial banks with Russian assets frozen by EU sanctions (3 December).