Hungarian veto and Belgian risks: how the EU fights for Ukraine’s funding

The European Union is preparing an alternative financing scenario for Ukraine in case leaders fail to agree on using frozen Russian assets to create a reparations loan.

According to Politico, Brussels fears that Kyiv may find itself without the necessary financial resources as early as 2026.

At a previous summit, EU leaders had hoped to agree on a mechanism that would allow frozen Russian reserves to be used to create a €140 billion loan for Ukraine. However, Belgium, which hosts most of these assets, continues to express reservations about the proposed scheme.

Because of this, the European Union is currently looking for a temporary solution that could be adopted at the summit on December 18 if the main plan is not ready.

One option is a bridge loan financed by EU joint borrowing. This mechanism should provide Ukraine with support in the first months of 2026, giving additional time for the final launch of a reparations loan, consistent with Belgian requirements and EU legal norms.

Two diplomats said that Ukraine will be able to return these temporary funds after receiving funding from the long-term mechanism.

The issues were discussed during a meeting of EU ambassadors with representatives of the European Commission. According to informed officials, after consultations, France, Germany, the Netherlands, Lithuania and Luxembourg called on the Commission to speed up work on options for supporting Ukraine.

At the same time, most EU countries are not ready to allocate additional grants from their budgets due to deficits and high costs of domestic borrowing. Therefore, the main task is to convince Belgium to agree to the use of frozen Ros assets.

According to European diplomats, one scenario could involve combining a reparations loan with other financial instruments.

The main obstacle, as Politico points out, remains the need for unanimous support from all 27 member states. And Hungary has long blocked any new programs related to aid to Ukraine, which complicates the decision-making process.

Recall, EU officials and the Belgian government were unable to find a solution to use frozen Russian assets to finance Ukraine’s needs over the next two years.

As reported, the European Union may find itself faced with the need to raise tens of billions of euros in joint debt if Belgium does not agree to unblock the mechanism of the so-called “reparation loan” for Ukraine.

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