Ukraine Aid Threatens EU Budget and Pushes Federal Agenda
The European Union is set to grant a new €90 billion loan to Ukraine—likely never to be repaid. But is that really the issue?
Where will the bidding war launched by the European Union to help finance Ukraine ultimately lead? Since 2022, more than €193 billion has been allocated to Kyiv. A few days ago, European leaders announced that they had agreed on an additional €90 billion, in a display of solidarity which—while unlikely to put the country back on its feet, let alone bring it anywhere near European standards for a hypothetical EU accession, especially in light of yet another corruption scandal rocking the country, this time involving members of parliament—will far more certainly drag the EU down under the weight of its own debt. A debt to which Ukraine will have made a substantial contribution.
But is the defence of Ukraine really the issue—or the only one?
In 2024, the European Court of Auditors warned of the risks such support posed to the EU budget. It was not the first time. As early as 2022, it had already highlighted the “significant increase in the EU budget’s exposure to the situation in Ukraine.”
As we wrote at the time, the way these loans are granted makes European taxpayers the ultimate fall guys. Our article, in French :
So where do things stand with the loans extended to Kyiv? They keep piling up. Most have not yet reached maturity, and no repayment is expected for the time being—at best, not before 2033.
There is, however, no guarantee that Kyiv will be able to repay the amounts borrowed. Not to mention the interest costs borne by the EU, which are soaring. Debt servicing alone is expected to reach €567 billion by 2027. In some cases, the money is simply handed over. Take the “Ukraine Facility” set up in early 2024: of the €50 billion allocated through 2027 to help rebuild the country, €17 billion consists of grants and interest subsidies—non-repayable by Kyiv.
With the additional €90 billion planned by Brussels for 2026 and 2027—still pending approval by the EU Council and the European Parliament—the question arises whether this will amount to yet another expenditure with no prospect of recovery.
