BRUSSELS — Europe’s long and bitter argument over how to pay for Ukraine’s war effort reached a new, uncomfortable stage in October 2026 — not with the breakthrough many in Kyiv had hoped for, but with a clear statement of the limits of what the European Union can currently agree. At a summit in Brussels on October 15 and 16, leaders heard a stark warning from Ukrainian President Volodymyr Zelenskyy that the war will cost about €155 billion in 2027 and that Kyiv needs at least another €70 billion from its partners. They left without a new funding package, without reviving the frozen Russian assets plan, and with only an instruction to the European Commission to come back with proposals for closing the gap.
That outcome is easily misread. The major package that actually exists is not a new October agreement to spend frozen Russian money. It is the €90 billion loan agreed in December 2025, financed by joint EU borrowing and backed by the EU budget, not by confiscating Russian central bank assets. The frozen assets — about €210 billion across the EU, about €185 billion at the Brussels clearing house Euroclear — remain frozen. October exposed how large the 2027 shortfall has become, and how divided Europe still is over using them.
What was agreed in December, and why it matters now
The December 2025 deal was presented at the time as an urgent answer to a looming cliff edge. Ukraine’s financing for 2026 and 2027, leaders said, had to be secured from the second quarter of 2026 onwards, including for military needs. The solution they chose was to borrow €90 billion on the capital markets through the EU budget, and to lend it to Ukraine interest-free, at €45 billion a year for 2026 and 2027. The loan was designed to cover roughly two-thirds of Ukraine’s external financing needs over those two years, on an assumption — now overtaken by events — that the war might end during 2026. The remaining third was expected to come from other partners, including the United Kingdom, Canada, Japan, South Korea, Australia and Norway.
The mechanism was a compromise, and its fine print explains much of the argument that followed. The loan is backed by EU budget headroom, the margin between the maximum amount the EU can ask member states to contribute and the amount it needs for foreseen spending. That allowed the EU to borrow without immediately raising national contributions, but it also created a bill for EU taxpayers: the Commission has estimated debt-servicing costs at around €1 billion in 2027 and about €3 billion a year from 2028. Three member states — Hungary, Slovakia and the Czech Republic — agreed to let the scheme go ahead only on the basis that it would not affect them financially, so they are not held liable for the debt.
Crucially, the frozen Russian assets were not used as collateral for the loan. Before December, the European Commission had proposed a so-called reparations loan: EU governments would use most of the €210 billion in immobilised Russian sovereign assets, investing the cash in zero-interest bonds issued by the Commission, to fund Ukraine. That plan was not confiscation, in the Commission’s legal framing, because Russia’s claim to the assets would remain intact while they stayed frozen. It collapsed, however, over the guarantees demanded by Belgium, where Euroclear holds the bulk of the money. Belgian officials warned of legal uncertainty and possible Russian retaliation, including litigation against Euroclear or other European entities, and insisted that other member states share every legal and financial risk before Belgium would agree.
Instead, leaders kept the assets frozen and added a carefully worded reservation. Ukraine would repay the €90 billion loan only once reparations are received, and the EU expressly reserves its right to make use of the frozen assets to repay the loan, in line with EU and international law. In practice, analysts note, that is a distant prospect: it would require Moscow to pay reparations, which it has shown no sign of doing. The wording therefore preserves a legal option without committing Europe to the political and financial risks of using the assets now.
The October summit: a €70 billion ask, and no new answer
When Zelenskyy addressed EU leaders on October 16, he put a number on the problem that the December compromise had left unresolved. The war, he said, will cost €155 billion next year, and Ukraine needs at least another €70 billion from its partners for defence, weapons procurement and keeping the state running — including a major expansion of domestic drone production to strike Russian forces and supply lines. Ukrainian officials had already flagged the shape of that gap in the preceding weeks: about $45 billion for military operations and about $32.6 billion to keep civilian government functions running, together roughly €70 billion.
The European Council’s conclusions reaffirmed support for Ukraine and welcomed loan payments already flowing, but they stopped short of naming a new figure. Leaders instructed the Commission to propose how to meet Ukraine’s additional 2027 financing needs, with the aim of a proposal before the end of the year. Commission President Ursula von der Leyen told Zelenskyy that Europe would support Ukraine as it had in previous winters, but she did not commit to a sum. Commission Vice-President Valdis Dombrovskis has noted that Ukraine’s needs already exceed the €45 billion it received this year, and that the EU expects to cover about two-thirds of the external gap — leaving a substantial share for others.
Objections from sceptical member states, led by Belgium
The most consequential objection at the October summit came, as it had in December, from Belgium. Prime Minister Bart De Wever arrived in Brussels insisting that his partners must share every legal and financial risk before Belgium would agree to any deployment of the roughly €185 billion held at Euroclear — and, according to reporting of the summit, he left with his position unchanged. Latvia’s prime minister was among the most vocal proponents of moving forward, saying the frozen assets should simply be used to support Ukraine, and EU foreign policy chief Kaja Kallas aligned herself with that view, proposing the assets be deployed to cover the looming shortfall. Belgium, however, remained immovable.
De Wever’s case, as he has set it out repeatedly, is not that Ukraine should receive less help, but that using the assets would amount in practice to confiscation, with consequences Belgium would bear alone. Euroclear is a Belgian institution, and any Russian legal challenge would land first in Belgian courts and on Belgian balance sheets. Moscow has already escalated its legal counter-offensive: reporting cites a Moscow court order in May for Euroclear to pay approximately $249 billion, and a countersuit filed by Euroclear in Brussels in June. Those figures are disputed and the litigation is complex, but for De Wever they illustrate the scale of exposure. He has demanded open-ended, collective guarantees from other member states — guarantees his partners have been unwilling to give in a form Belgium considers sufficient.
On October 21, speaking before the Federal Advisory Committee on European Affairs, De Wever said he was certain the European Commission would not propose using frozen Russian assets held in Belgium to finance Ukraine, citing assurances given at the summit. He added that he could not guarantee individual member states would not raise the issue again. That distinction matters: the Commission, as the body that would have to draft any proposal, has said it will not reopen the debate, but the political argument among leaders is not closed. A senior EU diplomat briefing ahead of the October summit had already warned that no new funding decision was expected and that positions on Russian assets had not changed — a prediction the summit bore out.
Kyiv’s and Moscow’s reactions
Kyiv’s reaction has mixed gratitude with urgency. Zelenskyy met De Wever for about 20 minutes on October 15, with no visible progress on the frozen funds; his subsequent post focused instead on Belgian fighter jets and ammunition against Russian Shahed drones. Foreign Minister Andrii Sybiha has argued publicly that the leverage is not in holding the money, but in using it for defence. For Kyiv, Russia should pay for the war it started, and if Europe does not use the assets, Moscow will try to recover them. Moscow, by contrast, has denounced any use of the principal as theft and argues it violates sovereign immunity, a claim EU lawyers contest but finance ministries take seriously.
What happens next for EU Ukraine funding from frozen Russian assets
Analysts who follow the file closely do not expect the frozen-assets question to disappear. An EU ambassador quoted by Euronews put it plainly: the issue will keep coming up again and again, and a solution will probably eventually be found, but not in the short term — not this month or next month. As long as the assets remain frozen in Europe, under European control, the option remains alive. The October summit, in that reading, was not the end of the argument but a pause: leaders acknowledged a gap they cannot yet fill, protected a compromise they can still defend, and left the hardest decision — whether Russian money should pay for Ukraine’s defence — for a later summit, under even greater pressure than today.
Separately, on October 29 the Commission urged states to use a €21.3 billion SAFE defence pot, including joint procurement with Ukraine — helpful, but no substitute for the €70 billion.
Sources
USN reviewed reporting from multiple outlets for this story. Read more from PRM, Brussels Signal and A News.