• The EU unveils a €90 billion ($105 billion) support package for Ukraine for 2026-2027.
• Belgium raises legal concerns over using frozen Russian assets for funding.
• The European Commission aims to cover two-thirds of Ukraine's projected needs.
• Two financing options include a reparations loan and joint EU borrowing.
• Controversy surrounds the legality and risks of the proposed solutions.

The European Commission has proposed a substantial €90 billion ($105 billion) package to support Ukraine's needs for 2026 and 2027. This funding strategy emerges as urgent, as Ukraine is expected to exhaust existing support following the substantial backing of the EU since the invasion began in 2022. The plan includes two options: a reparations loan utilizing Russian assets frozen in EU member states, and a joint borrowing mechanism through EU capital markets. Both options aim to reinforce Ukraine's war efforts while signaling to Russia the financial repercussions of its invasion, according to Le Monde, Al Jazeera, and Anadolu Agency.

Commission President Ursula von der Leyen highlighted that the EU intends to cover approximately two-thirds of Ukraine's total funding needs, underlining that the International Monetary Fund estimates those needs at €135 billion. With the ongoing war and stalled peace negotiations, the urgency for a solid financing mechanism is palpable; however, Belgium has expressed serious concerns about the potential legal ramifications of the proposed reparations loan, viewing it as a risky maneuver. The proposal states that Ukraine would only repay the loan once Russia compensates for the war damage, which has raised skepticism among some EU member states, particularly Belgium, according to Al Jazeera, Le Monde, and Anadolu Agency.

Belgium's government worries that allowing the use of frozen Russian assets as collateral poses systemic risks, fearing repercussions from potential legal actions by Russia against Euroclear, the financial institution holding a large portion of these assets. Belgian Foreign Minister Maxime Prevot voiced the government's concerns, asserting that the reparations loan could present overwhelming financial liabilities to Belgium, which he stated should not face the risks alone. He argues for an alternative approach involving traditional market borrowing to ensure a comprehensible and established financing route for Ukraine, as detailed by Al Jazeera, Al Jazeera, and Anadolu Agency.

Among proposed solutions, the EU aims for a robust framework that would mitigate risks associated with employing these frozen assets. With internal discussions ongoing, Commissioner von der Leyen emphasized that any plan would need to respect the legal frameworks and collective solidarity among EU states. The upcoming European Council summit scheduled for December 18 is set to refine these financing mechanisms, aiming for a clear commitment from member states to tackle the financial challenge facing Ukraine in light of the ongoing conflict, as reported by Al Jazeera and Anadolu Agency.