Ukraine’s finances are heading toward a hole of about 70 billion euros in 2027, and European leaders have few good ways to fill it. They are due to meet toward the end of November to settle assistance for next year.
What Europe has already promised
Kyiv’s Western partners have given over 170 billion euros ($189.5 billion) in financial support since 2022, according to the Kiel Institute. With the US curtailing aid under the second Trump administration, much of that burden now falls on the EU, along with Canada, Japan, Norway and the United Kingdom.
Earlier this year the EU approved a two-year loan plan worth 90 billion euros for 2026 and 2027: 60 billion for arms procurement and 30 billion for budget support. Around 14 billion has been paid out so far, and the total should reach 45 billion by year-end. The second half follows next year. Rising needs, especially after Russian attacks on critical infrastructure, still leave the 70 billion euro gap.
Little room at home
European capitals are squeezed. Average NATO European defense spending stood at around 1.6 percent of GDP in 2021 and has risen to 2.5 percent, and NATO committed in 2025 to raise core spending to 3.5 percent of GDP over the next decade. Eurozone debt averages nearly 89 percent of GDP. The IMF projected earlier in October that eurozone economies will grow only 1.1 percent in 2026. Eurozone inflation hit 3.8 percent in September, and the ECB, which raised rates in June and September, is expected to raise them again before year-end.
Supporting Ukraine remains broadly popular, but governments find it hard to raise aid while also rearming. Italy was approved for up to 14.9 billion euros from the EU’s SAFE loan facility yet asked for only about 8 billion, as Giorgia Meloni’s government sparred with critics over financing defense with debt.
The frozen assets problem
The obvious alternative is to turn frozen Russian assets into a loan. As much as $300 billion has been impounded since 2022, including about 210 billion euros in the European financial system. The principal is untouched, but interest income has generated about 8 billion euros in windfall profits: 3.8 billion delivered to Ukraine and 4.2 billion set aside to repay EU or G7 loans.
In September, Germany and other members revived the idea of a loan, POLITICO reported. Berlin sees it as a win-win that would also replace some funds earmarked for Ukraine in the next multi-year EU budget. Belgium, however, is custodian of much of the money through Euroclear in Brussels and fears carrying the legal and financial risk alone. Earlier this year the Bank of Russia sued in Moscow for the funds’ release, and the court backed it two months later, though it cannot enforce the ruling. Belgium blocked a similar attempt in 2025.
Prime Minister Bart de Wever told reporters on October 21: “I am certain that the European Commission will not make proposals to meet Ukraine’s financing needs through a new operation linked to Russian assets.”
Urgency grows
Ukraine has largely exhausted its stock of air-defense interceptors, and Ukrainian military intelligence estimated earlier in October that Russia can produce 10,000 long-range strike drones and decoys a month. In February the war enters its sixth year.
