With Ukraine rapidly burning through cash to pay for its ongoing war against Russia, European Commission President Ursula von der Leyen signaled her preference this week for a controversial EU plan to borrow 90 billion euros for aid to Ukraine, secured by frozen Russian assets. The amount is enough to cover two-thirds of Ukraine’s expected defense and reconstruction costs through 2027, with “other international partners” expected to cover the remainder.
Von der Leyen also offered a second option to secure the funds: an EU loan based on common borrowing. She framed this as a flexible response to legal concerns raised by Belgium, which holds most of the Russian assets. In reality, given the opposition within the bloc to common debt, it was a fig leaf.
For the better part of three years, since Russia’s invasion of Ukraine in 2022, Europe has twisted itself into knots over hotly debated proposals to leverage 290 billion euros, or $325 billion, in Russian currency reserves—about 63 percent of which are held at the Euroclear securities depository in Brussels—to fund assistance to Ukraine. European officials were consumed by questions over sovereignty, fears of lawsuits and concerns about setting a dangerous precedent. Their paralysis created an opening.
