The European Commission has put forward a groundbreaking proposal to secure Ukraine’s long-term financial stability, advocating for the use of profits generated from immobilized Russian state assets. Announced on Wednesday, the plan aims to furnish Kyiv with up to 90 billion euros over a two-year period starting in 2026, a sum intended to cover a significant majority of the nation’s anticipated budgetary shortfall. This initiative marks a substantial escalation in the bloc’s strategy to bolster Ukraine’s defense and reconstruction efforts while directly targeting the financial underpinnings of Moscow’s military campaign.
European Commission President Ursula von der Leyen framed the move as both a practical measure and a strategic signal. "We are increasing the cost of Russia’s war of aggression," she stated. "And this should act as a further incentive for Russia to engage at the negotiating table." The proposal outlines two primary mechanisms: a large-scale EU loan raised on capital markets, or a more direct "reparations loan" backed explicitly by the windfall profits earned from frozen Russian sovereign assets. These assets, seized following the 2022 invasion, are held primarily by the Belgian clearing house Euroclear, with other institutions in France, Germany, Sweden, and Cyprus also involved.
The legal and political intricacies of the plan are considerable, not least because of reservations voiced by Belgium, where Euroclear is based. Belgian authorities have expressed concerns regarding potential financial stability risks and legal challenges, arguing that these issues, while acknowledged by the Commission, remain not entirely settled. The proposal must now navigate complex negotiations among all 27 member states, requiring unanimous approval to proceed. President von der der Leyen emphasized the collective burden-sharing vision, noting, "We are proposing to cover two-thirds of Ukraine’s financing needs for the next two years. That’s 90 billion euros. The remainder would be for international partners to cover."
Concurrently, the European political landscape demonstrated further alignment with Kyiv’s priorities. On Thursday, Cypriot President Nikos Christodoulides undertook a visit to the Ukrainian capital, outlining an ambitious agenda for his country’s forthcoming presidency of the EU Council in the first half of 2026. Seeking to counter perceptions that Cyprus might focus predominantly on regional Mediterranean issues, Christodoulides presented 19 specific proposals to President Volodymyr Zelenskyy. These included plans to host a formal EU Foreign Affairs Council meeting in Kyiv, organize numerous technical EU working groups on Ukrainian soil, and prioritize the issue of abducted Ukrainian children. Discussions also touched upon sanctions enforcement, with Nicosia reportedly seeking Ukraine’s assistance in addressing allegations of sanctions circumvention via Turkish entities.
The twin developments underscore a European pivot towards more permanent, institutionalized support mechanisms for Ukraine, moving beyond ad-hoc aid packages. The asset-based funding proposal, if realized, would set a profound precedent in international law and finance, effectively leveraging the aggressor’s own resources to aid the victim. As the bloc prepares for a new institutional cycle, the challenge will be to transform these bold propositions into legally sound and unanimously agreed action, ensuring Ukraine’s path remains fortified for the years ahead.