The first EUR 3.2 billion reaches Kyiv, and the assets question goes quiet

On 25 June, at the Ukraine Recovery Conference, President von der Leyen announced the first disbursement under the Ukraine Support Loan. The Commission paid EUR 3.2 billion of macro-financial assistance after Ukraine met seven policy conditions set in a Memorandum of Understanding signed in May[1]. A defence package of about EUR 6 billion for drone procurement is to follow within days[1]. The European Council had asked for exactly this on 18 June. Its conclusions looked forward to the "first disbursement to Ukraine from the EUR 90 billion loan for 2026 and 2027" and urged the production and delivery of priority equipment, listed as air defence, ammunition, drones and missiles[2].

For our generation, this loan is the first time the Union has borrowed jointly to pay for a war that is not ours in name and is ours in fact. How it is financed, and what happened to the alternative, deserve a plain account.

How the loan is financed

The Commission's first option in December was a reparations loan of up to EUR 210 billion, funded from the cash balances of the financial institutions that hold immobilised assets of the Central Bank of Russia. It carried an indicative EUR 95 billion for macro-financial assistance and EUR 115 billion for defence industrial capacity[3]. The second option was joint borrowing of EUR 90 billion on the capital markets, guaranteed by the headroom of the Union budget, which requires an amendment to the multiannual financial framework and therefore unanimity[3]. Belgium, where Euroclear holds most of the immobilised assets, resisted the first option and asked for "iron-clad guarantees" against the economic and reputational consequences[3]. Italy, Bulgaria, Malta and Czechia supported the Belgian position[3].

The European Council of 18 December 2025 chose the second option. Its conclusions provide for "a loan to Ukraine of EUR 90 billion for the years 2026-2027", "based on EU borrowing on the capital markets backed by the EU budget headroom", by means of enhanced cooperation under Article 20 TEU[4]. The conclusions state that the use of the budget as guarantee "will not have an impact" on the financial obligations of the Czech Republic, Hungary and Slovakia[4]. The Council authorised the enhanced cooperation by Decision (EU) 2026/258 of 29 January 2026, and Parliament and Council adopted Regulation (EU) 2026/467 on 24 February 2026, with twenty-four participating Member States[5]. The Regulation describes the loan as a limited recourse loan, repayable by Ukraine "only once reparations are received"[5]. On 23 April the Council adopted the implementing decision that makes EUR 45 billion accessible in 2026: EUR 8.35 billion through macro-financial assistance, EUR 8.35 billion through the Ukraine Facility and EUR 28.3 billion for defence industrial capacity[6]. The indicative split of the whole envelope is EUR 30 billion for budget support and EUR 60 billion for defence[6].

Two consequences follow. The risk sits with the Union budget and, behind it, with the taxpayers of twenty-four Member States, since Ukraine repays only if Russia pays. The Union has also borrowed jointly for a purpose that is neither a pandemic nor a cohesion programme. Agathe Demarais of the European Council on Foreign Relations called German agreement to the joint debt significant, given Berlin's long opposition to common borrowing[7].

The first disbursement

The EUR 3.2 billion paid on 25 June is the first of three macro-financial instalments planned for 2026. EUR 3.7 billion is expected in September and EUR 1.45 billion before the end of the year, which brings the 2026 total to EUR 8.35 billion[1]. The conditions met for the first instalment include extending the military levy, draft legislation on taxing income from digital platforms and closer alignment of customs legislation with the acquis[1]. The defence side is larger and slower. Products bought with the loan may come from Ukraine, the Union, the EEA-EFTA countries or third countries with a bilateral agreement under the SAFE Regulation, with targeted derogations where Ukraine urgently needs a product unavailable from those sources[6].

The timing matters. The European Parliament's research service reported in December that Ukraine's 2026 budget needed EUR 43 billion of international aid, of which only EUR 22 billion was firmly confirmed[3]. The IMF projected a financing gap of roughly EUR 130 billion for 2026 and 2027[7]. The Union's EUR 90 billion covers about two-thirds of that gap, and the June conclusions ask the Union to keep reaching out to third countries to "close the remaining gap in Ukraine's finances"[2].

The assets that went quiet

Two things happened to the immobilised assets in December, and only one is still visible. On 12 December 2025 the Council adopted Regulation (EU) 2025/2600 on the basis of Article 122(1) TFEU, by qualified majority, prohibiting any transfer of the immobilised central bank assets back to Russia. That Regulation sits in Union law until revoked and no longer depends on the six-monthly renewal of sanctions by unanimity[3]. The December conclusions added that the assets "should remain immobilised until Russia ceases its war of aggression" and compensates Ukraine, and that "the Union reserves its right to make use of them to repay the loan"[4].

The June conclusions on Ukraine do not mention the assets at all[2]. We do not read that silence as a decision. We read it as a postponement that nobody wanted to announce. The reparations loan failed on a question of risk allocation between Belgium and the rest, and that question has not been answered. The limited recourse clause in the Regulation means the Union carries the loan until reparations exist. If the war ends without reparations, the Union budget pays.

Four things should follow. The Commission should publish, alongside each disbursement, a running statement of the Union's borrowing for the loan and of the guarantee drawn on the headroom. The European Council should state at its next meeting whether the reservation of December 2025 remains its position, and if so, instruct the Commission to present a legal mechanism that answers Belgium's demand for guarantees. The participating Member States should agree now on the burden-sharing key that applies if the loan is not repaid, because a guarantee without a key is a dispute deferred. The Commission should publish the product schedules for the defence pillar as they are adopted, so that European and Ukrainian industry can plan against them.