EU support to Ukraine in 2026: the saga of the reparations loan

How to finance the war effort in Ukraine has been at the forefront of EU leaders’ discussions within the European Council. To date the EU has contributed more than EUR 177 billion in military, economic and political assistance. EU assistance to Ukraine combines this macro-economic and political support with military assistance and sanctions. To adopt sanctions, the EU’s decision-making procedure requires unanimity among its Member States. Their implementation depends on 27 national systems.

In addition to banning some Russian individuals from entering the EU, banning imports of Russian products (natural gas, oil, etc.) and export restrictions, some sanctions consist in freezing Russian assets.

In 2024, the EU decided that most of the profits generated from such frozen assets would be earmarked for EU military assistance.

Further to this, the Council of the European Union decided that frozen assets and the profits they generate were to be managed separately. Most of the frozen Russian assets are held by Western democracies amounting to between USD 300 and 330 billion. Euroclear (a Belgian private company) holds more than half of this amount (estimated at EUR 185 million).

Plans to use the frozen Russian assets have been envisaged since the beginning of the war of aggression and, recently, the President of the European Commission argued that the cash balances associated to those Russian assets could be used as a reparations loan of EUR 140 million in support of Ukraine. The Commission’s plan was not well received in all quarters, with some analysis highlighting the economic and legal risks it entailed. At the European Council of 23 October 2025, the Commission was tasked to come back with more financing options.