The European Union has made its biggest financial bet ever on Ukraine, pledging financial support to the conflict-ridden country until 2027. The massive financial support by the EU came after EU Council head Antonio Costa committed during a Brussels summit, where it seems that any attempt by Belgium to veto the plan has failed. The financial commitment also involves tapping into frozen Russian assets for €140 billion, which has unleashed catastrophic controversy on the continent.
The Brussels summit grapples with Ukrainian economic needs through 2027
The leaders of the EU met in Brussels to sign the historic financial package with President Volodymyr Zelenskyy from Ukraine. The EU financial package will support Ukraine for two years, including financial support for the purchase of military equipment. The financial package is historic because it has enabled Ukraine to secure the financial support it needs for the next two years, including the purchase of military equipment.
The summit also witnessed the EU imposing a sanctions package on Russia, including Russian liquefied natural gas from January 2027. Other sanctions include so-called ‘shadow tanker’ fleets, as well as two standalone Chinese oil refineries. The package will accompany the financial support package provided to Ukraine, thus providing an all-inclusive package targeting Ukraine and Russia.
Belgium’s opposition threatens the frozen assets utilization plan
Belgian Prime Minister Bart De Wever laid out three specific demands for using Russian immobilized assets, threatening to block the entire scheme if conditions aren’t met. He insists all EU members must share risks associated with the plan, including costs of potential Russian legal action and financial contributions if money needs repayment.
Frozen Russian assets become the backbone for Ukraine’s support
The EU has financial commitments for Ukraine until 2027, while using the frozen Russian assets is the first time the EU has thought seriously about how to use frozen enemy assets for military and financial assistance. The loan, amounting to €140 billion ($163.27 billion), will be guaranteed by the frozen assets that Russia possesses, mainly through a securities depository called Euroclear in Belgium.
Belgium possesses the frozen assets that would be used for the historic project, making it difficult for the EU to negotiate without leverage when talking to Belgium. The proposal by De Wever includes ensuring that the EU is transparent concerning the risk factors and the legal framework that defines the process, apart from including frozen assets from Russia that are in other countries.
Risk-sharing mechanisms require unanimous EU member agreement
The Belgian risk-share requirements are linked to larger concerns for legal and financial risk. Each EU country will contribute financially if Russia wins a challenge to the seizure of assets or if a refund is needed. This type of collateral for loans via frozen assets is a new frontier for sanction strategies.
Ukraine seeks autonomy over loan spending and rapid disbursement
Ukrainian officials want complete autonomy over how to spend the loan funds, with a senior administration official telling Reuters that Ukraine needs the money by year’s end. Some EU countries want all money to go toward Ukraine’s military, with bulk spending on European weapons, while others support allowing purchases of U.S. arms and general budget support.
“We will take the political decision to ensure the financial needs of Ukraine for 2026 and 2027, including for the acquisition of military equipment.”
The EU plan to assist Ukraine through the frozen Russian funds until 2027 is a new record never seen in world finances and sanctions. In spite of the opposition from Belgium and all the challenges that come with the process, the EU is rising to the challenge, marking a new benchmark that will revolutionize the economics of economic warfare.