Ukraine is urging European partners to make a political decision next month to unlock a proposed $163 billion loan backed by frozen Russian state assets, as it confronts a major 2026 budget gap and the fallout from a growing corruption scandal.
European leaders failed to agree on the “Reparations Loan” for Kyiv last month and will discuss it again at a summit on December 18, with Ukraine expected to need its first big injections of financial support from the second quarter of 2026.
A senior official in President Volodymyr Zelenskyy’s administration told that the summit looked to be the last chance for Europe this year to agree to provide the loan for Ukraine, a move Russia said would elicit a “painful response”.
A Hole In Wartime Budget Looms
With little clear prospect of direct U.S. aid under President Donald Trump, Ukraine could run out of money during the first quarter of next year if new European assistance does not come through, economic analysts say.
EU leaders agreed last month to meet Ukraine’s “pressing financial needs” for the next two years but stopped short of endorsing a plan to use frozen Russian assets to fund a giant loan to Kyiv because of concerns raised by Belgium.
On Monday, European Commission President Ursula von der Leyen told European governments in a letter that there were three options to finance Ukraine and that a combination of them was also possible.
Apart from the loan, the options include European Union countries providing grants and the bloc borrowing on markets.
The document estimated that Ukraine’s remaining needs for 2026-2027 amounted to 135.7 billion euros ($157.37 billion).
The Commission’s proposal to use frozen Russian assets would produce a loan of 140 billion euros, covering those needs.
(With inputs from Reuters)
