“Europe faces billions in losses without agreement on reparations loan for Ukraine – FTEU countries could pay up to 5.6 billion euros in interest payments annually if they do not agree on 140 billion euros for Ukraine, secured by Russian assets. The European Commission sent a document to EU capitals, highlighting the financial consequences of rejecting this plan.
”, — write: unn.ua
DetailsThe European Commission has sent a document to EU capitals outlining the financial consequences if a 140 billion euro loan package for Ukraine, secured by frozen Russian funds, is not agreed upon.
The document states that if the plan for a loan to Ukraine using Russian funds remains unaddressed, then the choice will be:
- The bloc’s 27 member states must either allow joint borrowing, which would burden already strained national budgets with billions of new obligations;
- or – provide Ukraine with direct grants totaling 140 billion euros.
Both options “would potentially require fiscal adjustments in some member states” and “directly impact their deficits and debt.”
According to the commission’s estimates, the cost of servicing the joint loan will be up to 5.6 billion euros per year after the full amount of 140 billion euros has been borrowed and provided to Ukraine. France, which has a large debt, will pay almost 1 billion euros of this amount.
The document also adds that Italy would contribute 675 million euros, and Belgium, which is already struggling to pass its state budget for next year, would take on almost 200 million euros per year in interest payments.
The commission’s document also contains a warning that a 140 billion euro loan could have “potential consequences for both market absorption and, in particular, for the rate the Union as a whole will pay for its loans.”
Will Belgium be given guarantees?The Financial Times notes that the plan blocked by Belgium last month provided only temporary “contingent liabilities” for member states to guarantee the loan to Ukraine, before the corresponding transfer of funds would be accounted for in the EU’s common budget in 2028.
The document with solution options is currently being discussed by member states. This is happening ahead of the summit in December 2025. According to officials, December is the final deadline for agreeing on a financial plan to support Ukraine. Some issues concerning Belgium may be resolved, the publication writes, if the European country’s government agrees to the relevant solution proposals.
The EU is looking for a way out of the legal conflictA key condition for the use of Russian assets will be “their continued immobilization” and the need to find a legal structure that allows assets to be frozen for longer than the existing six-month periods, which must be constantly renewed under EU sanctions law.
Belgium fears that if an EU country vetoes a decision to extend sanctions immobilizing assets, then the following will happen:
Russia could likely recover the funds and force EU capitals to pay the full amount of the loan
RecallUNN reported that the European Union is preparing to use frozen Russian state assets worth 140 billion euros to finance a large loan to Ukraine.
The European Commission is considering covering Ukraine’s funding gap with funds raised from joint EU debt and bilateral grants from member states. These options complement the proposal to use immobilized sovereign Russian assets totaling 140 billion euros.
Belgium and European Commission to hold ‘crisis meeting’ on frozen Russian assets for Ukraine – Politico05.11.25, 09:17 • 18696 views