(MENAFN) The European Commission has unveiled a massive €90 billion ($105 billion) financial lifeline for Ukraine spanning 2026-2027, merging collective EU debt issuance with revenue generated from frozen Russian assets held within Europe.

European Commission President Ursula von der Leyen rolled out the unprecedented proposal in Brussels on Wednesday, warning that Ukraine has reached a "critical juncture," as peace talks proceed amid Russia "intensifies its attacks."

She highlighted IMF projections showing Ukraine requires €135 billion over the coming two years to maintain core government operations and sustain its military defense.

Von der Leyen declared the EU stands prepared to fund two-thirds of that total—€90 billion—while urging global allies to bridge the remaining gap.

The proposal outlines dual financing pathways for member nations to consider. Under the first mechanism, the European Commission would secure capital through international markets using the EU budget as collateral, then channel those funds to Ukraine as loans—a route demanding unanimous approval from every EU member state.

The second approach involves the Commission borrowing against interest income accumulated from immobilized Russian Central Bank reserves deposited throughout EU banking institutions, with those proceeds transferred to Ukraine as what officials term a reparations loan.

Under this structure, Kyiv would only face repayment obligations after Russia fulfills war reparations payments. This pathway permits adoption through qualified majority voting.

Von der Leyen stressed the framework incorporates robust protections shielding EU nations and banking institutions from potential Russian countermeasures or illegal enforcement attempts in non-EU jurisdictions.

A "solidarity mechanism" would distribute any remaining risks across the entire EU membership, she explained—a guarantee directed particularly toward Belgium, which hosts Euroclear, the primary custodian of Russian assets immobilized within the bloc.

Belgian authorities have expressed concern over potential litigation exposure and financial liability falling solely on their shoulders, demanding that all EU member states collectively shoulder both legal and financial risks associated with the initiative.

"The message to Russia is that the Reparations Loan is increasing the cost of its war of aggression. So it's an invitation to come to the negotiation table to finally find peace," she said.

The commission called for swift action, stating the Dec. 18-19 European Council summit must produce unambiguous political backing from EU leadership.

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