Von der Leyen outlines three possible options to finance Ukraine

There are three ways to meet Ukraine’s financial needs, including a loan backed by frozen Russian assets, though a combination is also possible, European Commission President Ursula von der Leyen said in a letter to European Union (EU) members.

Expanding on this, von der Leyen stated that these three options consisted of support financed by member states through grants, a limited-recourse loan funded by the Union’s market borrowing, or a limited-recourse loan tied to the cash balances of immobilised assets, Caliber.Az reports, citing Reuters.

In the accompanying options paper, von der Leyen noted that “the three options are not mutually exclusive. They can be combined or sequenced”.

"Given the urgency of the situation, varying complexity of the options, and the need to start disbursements by the second quarter of 2026, any selected option could be designed as transitional and time limited," the paper stated.

As an illustration, it noted that the approach of non-repayable support funded by member states and the option of EU borrowing on financial markets "could serve as bridging solutions" until the bloc’s new long-term budget takes effect in 2028, which could then act as a guarantee for EU-backed loans.

Meanwhile, in her letter, von der Leyen stressed to EU capitals that swift action is essential.

"It will now be key to rapidly reach a clear commitment on how to ensure that the necessary financing for Ukraine will be agreed at the next European Council meeting in December," she said.

EU leaders agreed at their summit last month to cover Ukraine’s urgent financial needs for the next two years, but they refrained from approving a proposal to use frozen Russian assets to back a major loan for Kyiv because of Belgium’s objections.

All member states except Hungary have asked the European Commission to present alternative options for sustaining financial support to Ukraine.

By Jeyhun Aghazada