Ursula von der Leyen has outlined several alternatives to the reparations loan for Ukraine as the EU faces a rapidly closing window to secure long-term financial support for Kyiv. With member states still divided over a €140 billion loan backed by frozen Russian assets, the Commission is attempting to prevent the deadlock from jeopardising Ukraine’s stability in 2025 and beyond.
The reparations-linked loan remains the Commission’s preferred tool, mainly because it shifts the financial burden away from EU taxpayers and places responsibility on proceeds generated by immobilised Russian central-bank assets. However, Belgium’s reluctance to endorse the loan—given its exposure to legal risks as the jurisdiction holding most of the Russian assets—has forced von der Leyen to lay out alternatives to the reparations loan for Ukraine to keep negotiations alive.
Her first option is to utilize additional “headroom” in the EU’s shared budget, enabling the Commission to raise funds on the market through EU-backed bonds. This approach mirrors instruments used during the pandemic recovery and would offer predictable multi-year support.
The second of her alternatives to the reparations loan for Ukraine involves coordinated national borrowing. Member states willing to participate could create a joint financing coalition outside the strict EU legal framework, ensuring cash flow for Kyiv even if unanimity remains out of reach.
A third path keeps the original reparations-based structure on the table but in a scaled or phased format. Von der Leyen argues this is still the most balanced solution, but she acknowledges that the political climate may require transitional models before complete alignment is possible.
All alternatives to the reparations loan for Ukraine come with trade-offs. Critics warn that diversifying options reduces pressure to use Russian assets, potentially shifting costs back onto EU budgets. Supporters counter that contingency planning is essential as delays threaten Ukraine’s financial stability at a moment of heightened geopolitical uncertainty.
Speculatively, if consensus remains elusive, a smaller group of member states may decide to proceed independently, challenging traditional EU financing norms while ensuring Ukraine does not face a funding cliff.
Also Read: EU and Belgium Deadlocked in Ukraine Reparations Loan Talks
