(MENAFN) The European Commission on Wednesday proposed a €90 billion ($105 billion) support package for Ukraine covering 2026-2027, combining joint EU borrowing with funds from frozen Russian assets held in Europe.

Speaking in Brussels, European Commission President Ursula von der Leyen described Ukraine as facing a “critical juncture,” with peace talks ongoing even as Russia “intensifies its attacks.”

She cited IMF estimates that Ukraine will need €135 billion ($157.5 billion) over the next two years to maintain essential state functions and defense operations. The EU intends to provide two-thirds of that amount, with von der Leyen urging international partners to supply the remainder.

The proposal outlines two financing mechanisms for member states. One involves raising funds on capital markets, backed by the EU budget, to lend to Ukraine—a method that requires unanimous approval from all EU countries. The second mechanism would borrow against frozen Russian Central Bank assets in EU institutions, transferring the money to Ukraine as a so-called reparations loan, repayable only once Russia pays war reparations. This option could proceed via qualified majority voting.

Von der Leyen emphasized that the package contains robust safeguards to protect EU nations and financial institutions from potential Russian retaliation or legal actions abroad. A “solidarity mechanism” would collectively absorb any remaining risks, addressing Belgian concerns over potential liability, particularly since Euroclear, based in Belgium, holds most frozen Russian assets.

“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 progress, noting that the European Council summit on Dec. 18-19 should produce a clear political commitment from EU leaders.

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