EU taxpayers will have to pay €3 billion per year in borrowing costs as part of a plan to raise common debt to finance Ukraine’s defense against Russia, according to senior European Commission officials.
The bloc’s leaders agreed in the early hours of Friday to raise €90 billion for the next two years, backed by the EU budget, to ensure Kyiv’s war chest won’t run dry in April.
The war-ravaged country faces a budget shortfall of €71.7 billion next year and is in desperate need of funds to ensure its survival after Russian President Vladimir Putin pledged to keep the conflict going on Friday.
Czechia, Hungary and Slovakia will not join the bloc’s other 24 countries in sharing the debt burden, but agreed not to obstruct Ukraine’s financing needs. As part of the carve-out deal, the Commission will propose a so-called enhanced cooperation early next week, giving the 24 countries a legal platform to raise joint debt.
Many of the hallmarks of the €210 billion financing package for Ukraine will be transferred to the new plan for common debt. These include payout structures in tranches, anti-corruption safeguards, and an outline for how much money should be spent on Kyiv’s military and the country’s budgetary needs.
European governments resorted to joint debt after failing to agree on a controversial plan to leverage frozen Russian assets across the bloc.
The new plan would provide Ukraine with €45 billion next year, handing Kyiv a crucial lifeline as it enters its fifth year of fighting. The remaining funds would be disbursed in 2027.
