EU Approves Two-Year Funding Plan for Ukraine Using Frozen Russian Assets

EU Approves Two-Year Funding Plan for Ukraine Using Frozen Russian Assets

The European Union has agreed in principle to provide €140 billion (around $163 billion) in financial support to Ukraine over the next two years (2026–2027), largely funded through profits and interest generated from frozen Russian assets, which will be used as collateral for loans to Kyiv. The decision marks a major political and economic step to sustain Ukraine’s defense and financial stability amid the ongoing conflict.

European Council President Antonio Costa announced that EU leaders are committed to finalizing the legal framework soon.

“This is not just Ukraine’s war — it’s Europe’s fight for peace, freedom, and stability,” Costa said.

However, the move has sparked debate among member states. Belgian Prime Minister Bart De Wever cautioned that since a significant portion of the frozen Russian assets — roughly $225 billion — are held in Belgium’s Euroclear financial institution, the legal and financial risks of using these funds should be shared equally among all EU members.

The plan does not involve transferring the frozen assets directly to Ukraine. Instead, the profits and interest generated from those assets will serve as backing for so-called “Reparation Bonds,” to be repaid once Russia compensates for wartime damages in the future.

During the summit, Ukrainian President Volodymyr Zelensky urged EU leaders to move quickly, warning that any delay would only benefit Moscow.

“Every day of hesitation strengthens the aggressor and weakens our defense,” Zelensky stated.

Analysts say the EU’s initiative is critical as Ukraine faces a severe financial shortfall and rising war costs. If fully implemented, the program would rank among the largest financial aid packages in EU history. Still, experts caution about potential legal challenges and Russian retaliation, as Moscow has condemned the move as “economic theft.”

Despite internal disagreements, the EU remains united in principle on maintaining long-term support for Kyiv. Officials believe the funding mechanism could become a model for future post-war reconstruction efforts, utilizing profits from aggressor-state assets to rebuild affected nations.

The decision underscores Europe’s determination to counter Russian aggression while supporting Ukraine’s sovereignty and recovery. Success will depend on the EU’s ability to navigate legal disputes, ensure transparency, and maintain member-state consensus on sharing risks and responsibilities.

Ultimately, this plan reflects a broader geopolitical shift — Europe positioning itself as both a financial and moral pillar in defending democratic nations under threat.