Low returns from Russian assets – EU will probably have to take on new debt for Ukraine

Given the lack of alternatives, the joint EU debt for aid to Ukraine threatens to soon exceed the 200 billion euro mark. As calculations by WELT AM SONNTAG based on figures from the EU Commission show, Brussels will probably have to transfer more than 40 billion euros from joint loans to Kiev in addition to the 166 billion euros transferred so far.

Ukrainian President Volodymyr Zelenskyj recently announced an additional financial need of 70 billion euros. According to current plans, 46 billion euros of this will be borne by the EU. Part of this is said to come from the interest generated by frozen Russian assets in Europe.

However, as figures from the Commission show, this is only likely to amount to a few billion euros per year. In the past two years or more, around eight billion euros have been raised. The most recent tranche flowed in August and comprised 1.4 billion euros.

According to the figures, Brussels had previously sent four further tranches: 1.4 billion euros in April of this year, 1.6 billion in August 2025, 2.1 billion in April 2025 and 1.5 billion in July 2024. They are therefore only likely to cover a fraction of the 46 billion euros required.

Since the actual capital stock of Russian assets is still unlikely to be touched for legal reasons, taking on new joint debt seems the most likely alternative.

The targeted Russian attacks on the civilian energy and logistics infrastructure are increasing the gap in Kiev's state budget, around half of which is now dependent on EU aid. This week, Ukraine's National Bank said the economy would shrink this year instead of growing by 1.8 percent as planned. This is likely to increase the financial requirements for the coming year.

In many EU states, rejection of further aid to Ukraine is growing. A new president will be elected in France next May. The favored candidate Marine Le Pen has spoken out in favor of an end to aid to Ukraine - and a radical reduction in French payments to around 20 percent of the current level.

In 2020, in the wake of the Corona crisis, the EU decided to take on collective debt. Since this taboo was broken, this route has been regularly taken for new loans, several times in the course of supporting Ukraine.

Dietmar Bartsch from the Left criticized new aid for Ukraine. "Citizens must not suffer financially for Putin's war. There can only be aid to Ukraine if it does not result in social cuts in this country." Merz and the EU must finally become a player in peace negotiations.

Marcel Fratzscher advocates “common European bonds” because of the war. In the long term, these would have to be borne by joint taxes, said the head of the German Institute for Economic Research (DIW). The decisive factors should be the financing needs, the effective use of funds and Europe's long-term economic and security policy interests. Over the next week, representatives from the EU and the member states, including heads of state and government, will meet to discuss how to proceed.

This article was created for WELT and “Business Insider Germany”.