In the early hours of December 19, 2025, European Union leaders approved a €90 billion, interest-free loan for Ukraine covering 2026–27, financed through joint EU borrowing backed by the Union's budget. European Council President António Costa confirmed the decision following overnight negotiations in Brussels, marking the bloc's largest single commitment to Kyiv's medium-term fiscal stability. The package shifts the EU's support architecture from ad-hoc instruments toward predictable multi-year financing, intended to stabilize Ukraine's budget and defence spending horizon while reducing liquidity and rollover risk.
The agreement represents a calculated choice: leaders opted for the tested mechanism of EU-level market borrowing rather than the more novel—and legally fraught—proposal to anchor a loan directly to the roughly €210 billion in immobilized Russian central-bank assets held in Europe. That "reparations loan" option, which would have borrowed cash balances from institutions holding the frozen assets, proved too complex to finalize at this summit, primarily due to Belgium's insistence on liability guarantees as host to Euroclear, where approximately €185 billion of the total sits. The chosen path prioritizes political unity and speed over financial innovation, but leaves unresolved the core question of how to translate frozen Russian wealth into scaled financing without breaching sovereign-immunity norms or concentrating legal exposure on a single member state.
Institutional creativity meets legal caution
The summit presented two Commission options: joint EU borrowing guaranteed by the EU budget, or a reparations loan leveraging immobilized asset balances. The first is familiar—the Union used the same mechanism for pandemic recovery borrowing—and carries well-understood risk-sharing. The second promised to shift financing costs toward Russia, but introduced novel legal risks. Belgium's position was decisive. With Euroclear holding the bulk of the frozen assets in Brussels, any asset-linked scheme concentrates litigation and retaliation risk in a single jurisdiction. Belgium has already blocked earlier EU reparations loan proposals over precisely these liability concerns, demanding indemnities and burden-sharing guarantees that proved impossible to finalize under summit pressure.
Legal and institutional concerns compounded the hesitation. Analysts have cautioned that asset-seizure mechanisms could create novel precedents affecting reserve-currency stability and the perceived security of central-bank holdings across the international system. Russia has already filed a $230 billion lawsuit in Moscow against Euroclear, signaling its counter-litigation strategy. Leaders chose not to test those legal boundaries in December, opting instead for the conventional route while preserving optionality on assets for the future.
The €90 billion figure reflects IMF and Commission estimates pegging Ukraine's 2026–27 financing needs at roughly €135–€136 billion; the EU aimed to cover approximately two-thirds, with G7 partners and other donors filling the remainder. The package builds on existing commitments: the Ukraine Facility providing up to €50 billion for 2024–27, exceptional macro-financial assistance totaling around €18.1 billion, the EU's ~€45 billion contribution to G7 Extraordinary Revenue Acceleration (ERA) loans, and the use of windfall interest from immobilized assets. Together, these instruments form a financing architecture that is comprehensive but legally and procedurally fragmented, requiring continuous coordination across member states, the Commission, and international partners.
Members are reading: How the EU's asset "reservation" buys time but leaves unresolved the legal architecture to mobilize €210 billion.
Predictability purchased, complexity deferred
The €90 billion package delivers what Ukraine needs most in 2026–27: predictable budget support that reduces dependence on volatile monthly donor pledges and allows multi-year defence and reconstruction planning. It also demonstrates the EU's capacity to mobilize large-scale joint financing despite internal fiscal and legal divisions. But the agreement's structure reveals the limits of that capacity. Leaders chose the path of least legal resistance, relying on established borrowing mechanisms rather than innovating around immobilized assets.
What remains unresolved is the question the "reservation of rights" language defers: whether the Union can design asset-linked repayment or collateral mechanisms that satisfy sovereign-immunity law, shield Belgium and Euroclear from concentrated litigation risk, reassure stakeholders on systemic stability, and withstand Russian legal and economic retaliation. The December summit bought time to answer that question. Whether that time will be used to build robust legal architecture, or simply to postpone the next round of summit brinkmanship, will shape Europe's fiscal solidarity with Ukraine—and its broader geopolitical credibility—well beyond 2027.
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