As part of the European Commission's preparation of proposals (an options paper) on how the European Union will meet Ukraine's financial needs in 2026-2027, alternatives to the so-called "reparations loans" based on frozen Russian assets are being considered – including joint EU state loans and bilateral lending.

Source: European Pravda, citing an EU official familiar with the discussions, speaking on condition of anonymity

Details: The EU is exploring various financing options for Ukraine in 2026-2027 in case Belgium refuses to participate in the "reparations loan" mechanism.

"There are two main options: the first is 'reparations loans' based on frozen Russian state assets, and the second is a loan model under which EU member states would take out credits to finance Ukraine over the next two years," the EU official said.

They added that a third model is also being discussed – bilateral loans or assistance to Ukraine from individual EU member states – but this would play a supplementary role.

The official described the "reparations loans" model as more advantageous, as, unlike standard loans, it does not involve paying interest.

They also said member states have already begun informal discussions on the pros and cons of each approach, with a final decision expected to be approved by EU leaders at the European Council meeting on 18-19 December in Brussels.

At present, most EU states lean towards the "reparations loans" model as the preferred option. However, Belgium – a key player in the process, as it holds more than €180 billion in frozen Russian assets intended for these loans – has yet to give its consent.

"Negotiations with Belgium on using Russian state assets to assist Ukraine are taking place behind closed doors. But I believe this should be possible," the EU official noted.

They added that "EU leaders are generally open to accommodating the Belgian government's concerns".

Background:

• As reported by European Pravda, German Defence Minister Boris Pistorius suggested that there may be a link between the recent drone incidents in Belgium and the ongoing discussions on using frozen Russian assets to support Ukraine.
• Drone sightings over airports and military bases have become a recurring issue in Belgium.
• Previously, EU officials privately expressed concern that the IMF might suspend financial assistance to Ukraine if member states fail to reach an agreement on providing Kyiv with a "reparations loan".
• A final decision on the "reparations loans" mechanism is expected in December 2025.

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