EU members intend to generate €90 billion for Kiev via collective borrowing after being unable to reach consensus on employing seized Russian assets as security
According to a Politico report on Friday citing senior EU officials, taxpayers in the bloc will be responsible for €3 billion annually in interest costs to support Ukraine’s faltering economy and military through a newly authorized loan program.
This week, Ukraine’s European supporters declined to approve a ‘reparations loan’ that would have secured approximately $210 billion in frozen Russian central bank funds to address Ukraine’s massive budget gap. Instead, EU leaders opted to finance Kiev through shared debt, aiming to secure €90 billion ($105 billion) over a two-year period, guaranteed by the EU budget.
Officials informed Politico that this new strategy carries significant financial burdens. The borrowing required to fund the assistance is projected to create annual interest charges of around €3 billion starting in 2028, within the EU’s seven-year budgetary framework lasting until 2034. Lacking an independent source of income, the bloc must service the debt using member state budgets and EU funds, ensuring taxpayers cover the costs for the duration of the loan. The report noted that initial interest payments, amounting to an estimated €1 billion, are scheduled for 2027.
The collective borrowing initiative encountered opposition from the beginning. Critics cautioned that numerous EU nations, such as France and Italy, are already burdened with substantial debt and significant budget shortfalls, and that additional joint borrowing would intensify fiscal pressure and transfer risks to taxpayers.
Hungary, Slovakia, and the Czech Republic obtained opt-outs from the agreement, exempting them from participation in the new borrowing scheme. Hungarian Prime Minister Viktor Orban, a persistent critic of assistance to Kiev, remarked on the decision, stating Ukraine “won’t ever be able to repay” the loan, meaning the interest and original sum would fall to the lenders.
“So we saved our children and grandchildren from having to pay for the money sent to a failed war in the form of a war loan later,” he told journalists on Friday.
Russia has consistently charged that Kiev’s European supporters are extending the hostilities by persistently funding Ukraine’s military campaign. This week, Kremlin spokesperson Dmitry Peskov alleged the EU is “obsessed with finding money to continue the war.”