The European Union has put the option of joint borrowing back on its agenda for the planned 46 billion euro new financial support for Ukraine. The fact that interest income generated from frozen Russian assets appears insufficient for the current package has led Brussels to turn to alternative financing methods.
Ukrainian President Volodymyr Zelenskyy had announced that his country's additional financing need was 70 billion euros. In the current planning, it is envisioned that 46 billion euros of this amount will be covered by the European Union.
However, the inability to use the principal capital of frozen Russian assets in Europe due to legal reasons makes it difficult to finance the support package solely with income generated from these assets. According to European Commission data, approximately 8 billion euros have been collected within this scope over the past two years.
From these revenues, 1.5 billion euros were transferred to Ukraine in July 2024, 2.1 billion euros in April 2025, 1.6 billion euros in August 2025, 1.4 billion euros in April 2026, and 1.4 billion euros in August 2026. It is stated that if joint European borrowing is activated due to the size of the new aid, the total joint debt burden could exceed 200 billion euros.
CONCERNS OVER CONTRACTION IN UKRAINIAN ECONOMY
Russia's attacks on Ukraine's energy and logistics infrastructure are making the country's economic outlook more fragile. It is stated that approximately half of the Ukrainian state budget is dependent on foreign aid, especially support from the European Union.
It has been reported that the National Bank of Ukraine has lowered its growth expectations, with the risk of contraction replacing the previously projected 1.8 percent growth. It is assessed that the deterioration in the economy could also increase the amount of external financing needed next year.
Political debates regarding new aid packages are also continuing in EU countries. German Left Party MP Dietmar Bartsch stated that the financial burden of the war should not be reflected on citizens, saying, "Citizens should not pay the price for Putin's war financially. Aid to Ukraine should only be provided on the condition that it does not lead to social cuts in our country."
Bartsch also called on German Chancellor Friedrich Merz and the European Union to take a more active role in peace negotiations. Marcel Fratzscher, President of the German Institute for Economic Research, proposed issuing joint European bonds to finance support for Ukraine; he stated that covering this debt with joint European taxes in the long term could also be evaluated.
Representatives of European Union institutions and member states are expected to meet next week to discuss the financing method for the new support. During the talks, the option of joint borrowing and the use of interest income from frozen Russian assets will be evaluated together.
News Source: 12punto
