By John Q. Hosedrinker 
Ursula von der Leyen has urged EU countries to agree by December on a plan to provide Ukraine with €135.7 billion in military and financial aid over the next two years. The European Commission President outlined three potential options, including voluntary member state contributions, joint debt at the EU level, and a reparations loan based on Russia’s frozen assets. While the first two options would increase the fiscal burden, the reparations loan faces legal complexities and concerns about perceptions of confiscation, especially regarding a large sum held in Belgium. Von der Leyen stresses the urgency of a decision, as the EU leaders will meet in December, and suggests that the options can be combined or used sequentially to avoid aid disruption.
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No easy options: Ursula von der Leyen has made a direct appeal to the European Union, urging member states to come together by December to agree on a financial plan. The aim? To cover Ukraine’s extensive military and economic needs over the next two years. The price tag is a staggering €135.7 billion, a sum that underscores the gravity of the situation and the critical need for sustained support.
The sheer scale of the funding required is laid bare in the assessment, which draws from estimates by the International Monetary Fund and Kyiv’s authorities. The letter highlights particularly pressing needs, including €83.4 billion to bolster the Ukrainian army and €55.2 billion to stabilize the economy and address the budget deficit. This is all based on the assumption that the full-scale war will conclude by late 2026, though, as acknowledged, that remains uncertain. A ceasefire, seen as vital for any peace agreement, is still proving elusive.
The plan offers three main options for funding. The first involves voluntary bilateral contributions from member states, dispensed as non-repayable grants. Von der Leyen suggests that these contributions should amount to “at least” €90 billion over the next two years. The second is joint debt, with either national guarantees or the bloc’s common budget covering the interest. This, however, would require unanimous approval, a hurdle given Hungary’s known opposition to further funding for Ukraine. Finally, the third option proposes a reparations loan, based on Russia’s immobilised assets. This approach would avoid extra expenses and would use the cash balances generated by the immobilised assets of the Russian Central Bank.
The challenge, however, isn’t simple. The first two options, voluntary contributions and joint debt, would increase the fiscal burden, potentially requiring either direct cash contributions or fresh money borrowed from the markets. The third option, the reparations loan, is appealing because it doesn’t incur extra expenses or impact national budget contributions. The legal ramifications of this last option are complex, however, particularly with regard to Belgium, which is a major hold-out, citing the need for legal certainty.
Belgium has demanded maximum legal certainty to protect itself against possible retaliation from Russia. Von der Leyen acknowledges these risks and warns of “potential knock-on effects.” She met with the Belgian Prime Minister to try to move talks forward, but progress has been slow. This whole thing makes it seem like there aren’t any easy options.
There are also, of course, the underlying issues. Questions of corruption within Ukraine are being raised, and calls for conditions on funding to address this concern are being made. The war’s impact extends far beyond the immediate financial needs, with the war causing human suffering, economic instability, and political challenges throughout Europe.
The discussion, naturally, also looks at the concept of “waking up”. What does it entail? The EU has already taken steps such as sanctions against Russia, sending aid and weapons to Ukraine, boosting its defense industry, and intercepting Russian vessels. Direct military involvement, however, is a step that seems to be debated frequently.
Many are concerned over the slow pace of action, and suggest that the EU could be more aggressive in providing Ukraine with what it needs to win. While acknowledging that there’s been great support for Ukraine, the lack of decisive action in several areas, coupled with a general fear of escalation, may have led to the war lasting longer than necessary.
The pressure is high, and the choices are difficult.