Ukraine aid: This is how the EU will raise the missing 70 billion euros

The EU's aid to Ukraine is not enough for the coming year. At the EU summit last week, Ukrainian President Volodymyr Zelenskyy estimated the gap at at least 70 billion euros. He said the war will cost the country a total of 155 billion euros by 2027 to the heads of state and government. With the additional money, Kyiv primarily wants to expand its own drone production. The Ukrainian government expects a need for an additional 32.6 billion US dollars for the state budget and 45 billion dollars for the armed forces. Together, this amounts to about 78 billion dollars, or approximately 70 billion euros. The European Commission has since adopted this estimate according to Euronews. The heads of state and government asked them to examine financing possibilities. Ukraine's loan of over 90 billion is no longer sufficient So far, the EU aid is based on a loan of 90 billion euros that the heads of state and government decided on in December. About 60 billion of this is allocated for military support, and 30 billion for the Ukrainian budget. The EU finances the loan through joint bonds on the capital market, secured by flexibility in the EU budget. The first tranche of 3.2 billion euros was disbursed in June. The loan was intended to cover two-thirds of Ukraine's needs for 2026 and 2027, with the rest to be covered by other allies. The Commission assumed in its planning that the war would end during this year. Instead, Russia has expanded its offensive and is now attacking the Ukrainian economy during the day as well. The 70 billion is added to the 45 billion euros that Brussels wants to repay from the existing loan in the coming year. The Commission emphasizes that the total sum must be raised together with partners such as Great Britain, Norway, Canada, and Japan. How much of this falls on the EU and how quickly Kyiv needs the money remains open. EU bonds: New debts will be more expensive The most likely scenario, according to diplomats, is that the EU will increase the existing loan and take on new joint debts for it. Investors regard the EU as a very safe debtor. However, loans have become significantly more expensive since December. Interest rates are rising worldwide, partly due to high oil prices and growing state debts. Interest rates for ten-year EU bonds rose from 2.8 percent in January to 3.44 percent in September. Highly indebted countries are hit particularly hard. Belgium is now paying interest rates similar to Greece, and France even more than Italy. The Commission emphasizes that, in comparison, the EU is still doing well. Furthermore, several countries are likely to be missing from new joint debts. Hungary, Slovakia, and Czechia are already falling short of the 90 billion loan. At the summit, the Slovak Prime Minister Robert Fico announced that he and Hungarian Prime Minister Péter Magyar would remain involved. Bulgaria could also withdraw. The new Prime Minister Rumen Radu has repeatedly criticized military aid to Ukraine. How much then falls on the other countries and on Germany remains open. Péter Magyar, the new Prime Minister of Hungary at the EU summit © Michael Kappeler, Pool/dts News Agency/imago The former ECB President Mario Draghi has long called for the EU to take on debts together on a large scale. The higher the interest rates rise, the more difficult it is to enforce politically. Russian assets: Belgium continues to block Some states are therefore once again bringing the frozen funds of the Russian central bank into play. About 210 billion euros are held in the EU from these funds, with 185 billion held by the financial service provider Euroclear in Brussels. Sweden, the Netherlands, Spain, and Poland have reignited the debate in August. In the meantime, Germany, Ireland, as well as the Nordic and Baltic states also support this move. Belgium rejects this further. Prime Minister Bart De Wever stated, according to Euronews, at the summit that his objections should remain frozen until the end of the war so that neither Moscow nor Washington can exert influence. Brussels also rejects a transfer to an EU-owned repository. France and Italy are also considered restrained. A similar plan had already failed in Belgium's resistance last year. Zelenskyy warns that Russia wants to get the money back. The US is thought to have suggested releasing some of it to Moscow to bring about peace talks, according to media reports. The Europeans rejected this. The EU ambassador in Ukraine, Katarina Mathernová, does not expect a quick agreement. The issue will come up again, but neither this month nor next month will be on the agenda, she said to Euronews. Le Pen and the EU budget: Negotiations under time pressure The talks are entering a difficult phase. In parallel, the member states are arguing about the next long-term EU budget. In France, Marine Le Pen of the National Rally is leading in opinion polls ahead of the presidential election. The Financial Times said last week that Europe, and especially France, cannot further increase its support. After an election victory in 2027, she wants to end financial aid to Kyiv within six months. In Germany, the AfD is also questioning the aid. Party leader Alice Weidel already announced in mid-September that a government led by the AfD would stop all payments to Ukraine. She stated last week in the British magazine Economist that Ukraine was "too small" and had "already lost the war" against Russia. She called for Germany to exert pressure on the Ukrainian president so that killing ends. Weidel's demand targets bilateral aid from the federal budget, which the federal government estimates at around 100 billion euros since 2022. The EU aid is in a separate pot. Germany, as the largest contributor, is also involved in the Brussels loan. A future federal government could not easily withdraw from the current loan. In case of an increase, however, it would be open to them to refuse, like Hungary and Slovakia. Ukraine's EU accession: These conditions posed to Brussels Ukraine Aid: Court examines Germany's 100 billion Your opinion is important to us. Send us your feedback on this article to: briefe@berliner-zeitung.de