The European Commission has proposed providing Ukraine with €90 billion in budget support over the 2026-2027 period under a so-called "reparation loan" scheme.
Roksolana Pidlasa, Chair of the Verkhovna Rada Budget Committee, announced the proposal following a meeting with the European Parliament's Budget Committee and Maarten Verwey, Director-General of DG ECFIN.
According to the Commission's working proposal, the "reparation loan" would be split into two tracks: weapons production and procurement (in both Ukraine and the EU) and budget support. The budget financing could be provided as macro-financial assistance or through the Ukraine Facility program.
Funding is conditional on continued reforms in the rule of law and anti-corruption sectors. Crucially, Ukraine would be obligated to repay the loan only if it receives reparations from Russia.
The Commission's proposal requires approval from the European Council before it can enter into force.
The issue of a reparation loan has remained a focal point for the EU in recent months. On December 3, the European Commission unveiled two potential solutions to meet Ukraine's financial needs for 2026-2027: EU borrowing backed by the budget, and a reparation loan that would authorize the EC to borrow cash balances from financial institutions holding immobilized Russian assets.
At the same time, according to The Wall Street Journal, the EU has scaled back the loan plan from $186 billion to approximately $105 billion (€90 billion disbursed over two years). This decision aims to address Belgium's concerns and preserve a reserve of funds for potential use by the Trump administration in peace negotiations. Consequently, over €100 billion in Russian assets within the EU would remain untouched, serving as potential European leverage in the negotiation process.
Belgium's position remains the key obstacle to more ambitious plans. According to the WSJ, the conflict comes down to differing assessments of legal risks: European institutions consider them minimal, while Belgian officials view them as significant. Ursula von der Leyen has called the reparation loan model the most effective way to support Ukraine's defense and economy.