EU ministers back reparation loan plan to support Ukraine in 2026–2027

The majority of European Union member states support the European Commission’s proposal for financial support for Ukraine for 2026-2027 in the form of a "reparation loan" based on immobilized Russian assets.

This was announced by European Commissioner for Economy Valdis Dombrovskis following the discussion of three European Commission proposals on this issue, which took place as part of the EU Finance Council meeting on Thursday in Brussels.

"We actually began today’s meeting with a productive discussion on options for providing additional financial support for Ukraine, as requested by the European Council. As the Minister already mentioned, the meeting saw broad support from Member States for the Commission to continue its work on the Reparation Loan. There was wide recognition that this option is the most feasible means of quickly bridging Ukraine’s funding gap, without placing additional substantial fiscal burdens on Member States," he said.

According to him, the continuation of this work obviously includes engaging with Member States to address remaining concerns.

"We also discussed possible alternative options. It has to be noted that given debt sustainability concerns and the challenges Ukraine is facing, the support has to have strong grant-like features. So alternative option would be for the EU to fund the Reparation Loan to Ukraine through borrowing instead of using the cash balances associated with immobilised Russian assets. However, Member States would have to cover the interest costs of the loan until its repaid to maintain grant-like support for Ukraine. There are different modifications of how exactly this borrowing can be structured," Dombrovskis said.

"Yet another option would be to provide a similar level of support to Ukraine but in the form of grants, which would entail a large debt cost to Member States over a short period of time. As regards the options paper, we should be able to present the options paper shortly. Today’s discussions will help to inform the Commission’s thinking in this regard," Dombrovskis said.

"It’s important in parallel to engage with our allies and like-minded partners to provide Ukraine with liquidity already in the first quarter of next year. Ukraine’s financing needs are not only large, but also urgent. We are under time pressure and must move forward in a constructive, pragmatic, and cooperative way," the European Commissioner said.

The Minister of Finance of the Danish EU presidency, Stephanie Lose, made a similar statement regarding the discussion of financing Ukraine.