Politico: EU weighs joint debt plan to keep Ukraine afloat

The European Union may soon be asked to raise tens of billions of euros in joint debt to sustain Ukraine’s finances, after Belgium blocked a proposal to tap profits from frozen Russian assets, according to three EU diplomats who spoke to Politico.

The idea of issuing collective EU debt — reminiscent of the pandemic-era recovery fund — has emerged as part of a “Plan B” now under consideration by the European Commission. The proposal is expected to appear in a forthcoming Commission paper, which will outline three options for member states: raising joint debt, pursuing a reparation loan backed by frozen Russian assets, or ending financial support for Ukraine altogether. The latter option, diplomats noted, is supported only by Hungary.

The debate intensified during the European Council summit on October 23, when it became clear that Belgium would not drop its opposition to using proceeds from Russian assets held at Brussels-based Euroclear.

Belgian Prime Minister Bart De Wever received the Commission’s latest legal proposal only on the morning of the summit, amid tense domestic budget negotiations — making agreement politically impossible, diplomats said.

With Kyiv projected to face severe financial strain by the end of the first quarter of 2026, EU officials are warning that Europe remains Ukraine’s only realistic financial lifeline.

Politioc wrirtes that leaders must decide on a course of action no later than the next European Council summit on December 18.

EU ambassadors are scheduled to review the fallout from the October 23 meeting during a Coreper session on October 29.

While the joint debt proposal would mark a major step for the bloc, it faces resistance from several highly indebted member states. Two diplomats suggested the plan may be intended as a “scarecrow” to push reluctant governments toward approving the use of frozen Russian assets — a move most countries still prefer.

The EU has previously rallied to provide large-scale support for Ukraine, but this round of negotiations is expected to be tougher. With the United States and other partners offering limited new aid, and key EU economies such as France struggling with budget shortfalls, the path forward looks increasingly fraught.

By Sabina Mammadli