Politico: EU Comes Up With 'plan B' To Support Ukraine

What's his point?

EU countries are preparing an emergency contingency plan to prevent Ukraine's financial collapse in early 2026 - in case the EU fails to agree in time on the use of frozen Russian assets to finance Kiev, Politico writes, citing sources.

A month ago, EU leaders hoped to agree on a mechanism to raise 140 billion euros - a so-called "reparation loan" to Ukraine from Russia's frozen reserves. But the idea faced stiff resistance from Belgian Prime Minister Bart de Wever: it is in his country that these funds are kept, and he fears legal consequences and retaliatory measures by Moscow.

In the meantime, the situation with the discussion of a possible peace agreement has developed rapidly, and Kiev's resources are rapidly shrinking. As one interlocutor noted, if the EU drags its feet on a solution, "others will get there sooner."

European officials believe Donald Trump's new peace initiative could help mobilize support for the reparation loan idea. The funds, according to the plan, would only have to be returned to Russia in the unlikely event that Moscow agrees to pay for the damage caused by the war in Ukraine.

European Commission chief Ursula von der Leyen is expected to commission a draft legal document on the reparation loan in the coming days. But Belgium is still in doubt, and time is almost out: EU leaders must approve the scheme at a summit on December 18.

Brussels experts are simultaneously working on a backup option - a "transitional" loan at the expense of EU borrowing. According to four European officials, it will allow Ukraine to stay afloat in the first months of 2026, until a full-fledged reparation loan mechanism is created.

There is also an option that Kiev will later return this "temporary" loan to the EU after receiving funds under the long-term reparation mechanism. But there are also many obstacles to the realization of this idea.

First of all, the creation of an interim loan through joint EU loans is a complicated step that requires the unanimity of all 27 countries. Meanwhile, Hungary in particular has for months opposed any new measures to finance Ukraine.

Additional influence comes from progress on the peace talks: updated drafts of the agreement already stipulate that frozen Russian assets should be used to rebuild Ukraine. The Europeans were strongly alarmed last week by a part of the original U.S. plan that spoke of possible U.S. benefit from the use of those assets. Now the EU is hoping to convince Trump's team that it is European countries that should have the final say - both on the assets, on sanctions against Russia, and on Ukraine's future membership in the EU.

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