Ukraine’s War Chest Shrinks as Europe Mulls Gamble with Russia Billions

Europe’s grand €90 billion answer to Ukraine’s funding crisis survived for just eight months before Volodymyr Zelenskyy began proposing that part of next year’s allocation should be paid early. Ukraine says it has already raided money earmarked for the second half of 2026 and is now staring down a €23.1 billion hole in its defense budget. JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official. That is why a letter from the foreign ministers of Sweden, Poland, Spain and the Netherlands has dragged Europe’s Russian-frozen-assets fight back onto the table. The four governments say the €90 billion package will be insufficient and want Commission experts to explore new uses for Russia’s immobilized assets. Bringing some of the 2027 money forward could fill part of this year’s hole. It would also obviously leave Ukraine with less money next year. That is the approaching financial cliff: Ukraine could run short again during 2027, while the EU’s next seven-year budget only begins in 2028. European governments would have to improvise another financial bridge in the meantime. The letter therefore returns to the €210 billion in frozen Russian assets, presenting them as the rope that could pull Ukraine back from the financial cliff edge. What’s new in the letter is that it acknowledges that a way must be found to share the responsibility and liability of using the money, so that Belgium is not left carrying the risk alone, the obstacle that stalled the plan in December. Other Topics of Interest ISW Russian Offensive Campaign Assessment, August 30, 2026 War in Ukraine - Latest update, key takeaways and map from the Institute for the Study of War on August 30, 2026. Until now, the Russian principal has largely been reserved for Ukraine’s eventual reconstruction. Sikorski argues that “it is better to use it to stop the aggression … rather than wait until the end of Russia’s aggression to spend it on reconstruction”. There is a clear logic here. Money spent defending Ukraine today can preserve its cities, factories and power stations, leaving less for Europe to rebuild later. Next year is arriving early Ukraine says its defense ministry faces a $27 billion, or €23.1 billion, funding gap this year. The shortfall includes around €6 billion in advance payments for equipment due in early 2027. Zelenskyy has suggested advancing part of the EU money scheduled for 2027, although the Commission says it has yet to receive a formal request. What is interesting here is that front-loading fits a pattern. If you look across Europe’s funding mechanisms, each one finds a different way to turn tomorrow’s resources into weapons or budget support today. In simple terms, each plan reaches into a different part of the future. The G7 loan brings forward the profits that Russia’s assets will generate over many years. The €90 billion package places the EU budget behind money borrowed from financial markets while waiting for Russian reparations. The proposed reparations loan would use the underlying Russian cash, leaving Euroclear with an EU promise to replace it. That final step explains why collective guarantees are important as Europe may have to provide the money if it ever has to be returned to Moscow. The instruments are distinct, and the same euro has not literally been spent several times. Even so, Europe has addressed successive immediate crises by placing claims on future profits, budgets and reparations. There’s nothing crazy about it. Governments borrow all the time because urgent bills can’t always wait for tomorrow’s tax money. But clever financial tricks don’t make the political gamble vanish; they simply push the costs down the road. And sooner or later, someone will have to shoulder the risk if the promised reparations or government funds fail to cover the bill. KYIV, UKRAINE - AUGUST 24: Ukraine's President Volodymyr Zelensky (C) welcomes international leaders upon their arrival to attend the Coalition of the Willing meeting on August 24, 2026 in Kyiv, Ukraine. Ukraine is marking the 35th anniversary of its independence on August 24, with Andy Burnham scheduled to meet President Zelensky and co-chair a Coalition of the Willing meeting with Germany's Chancellor Friedrich Merz and France's president Emmanuel Macron joining by video link. (Photo by Henry Nicholls-WPA Pool/Getty Images)Europe’s grand €90 billion answer to Ukraine’s funding crisis survived for just eight months before Volodymyr Zelenskyy began proposing that part of next year’s allocation should be paid early. Ukraine says it has already raided money earmarked for the second half of 2026 and is now staring down a €23.1 billion hole in its defense budget. That is why a letter from the foreign ministers of Sweden, Poland, Spain and the Netherlands has dragged Europe’s Russian-frozen-assets fight back onto the table. The four governments say the €90 billion package will be insufficient and want Commission experts to explore new uses for Russia’s immobilized assets. Bringing some of the 2027 money forward could fill part of this year’s hole. It would also obviously leave Ukraine with less money next year. That is the approaching financial cliff: Ukraine could run short again during 2027, while the EU’s next seven-year budget only begins in 2028. European governments would have to improvise another financial bridge in the meantime. The letter therefore returns to the €210 billion in frozen Russian assets, presenting them as the rope that could pull Ukraine back from the financial cliff edge. What's new in the letter is that it acknowledges that a way must be found to share the responsibility and liability of using the money, so that Belgium is not left carrying the risk alone, the obstacle that stalled the plan in December. Until now, the Russian principal has largely been reserved for Ukraine’s eventual reconstruction. Sikorski argues that “it is better to use it to stop the aggression … rather than wait until the end of Russia’s aggression to spend it on reconstruction”. There is a clear logic here. Money spent defending Ukraine today can preserve its cities, factories and power stations, leaving less for Europe to rebuild later. Next year is arriving early Ukraine says its defense ministry faces a $27 billion, or €23.1 billion, funding gap this year. The shortfall includes around €6 billion in advance payments for equipment due in early 2027. Zelenskyy has suggested advancing part of the EU money scheduled for 2027, although the Commission says it has yet to receive a formal request. What is interesting here is that front-loading fits a pattern. If you look across Europe’s funding mechanisms, each one finds a different way to turn tomorrow’s resources into weapons or budget support today. In simple terms, each plan reaches into a different part of the future. The G7 loan brings forward the profits that Russia’s assets will generate over many years. The €90 billion package places the EU budget behind money borrowed from financial markets while waiting for Russian reparations. The proposed reparations loan would use the underlying Russian cash, leaving Euroclear with an EU promise to replace it. That final step explains why collective guarantees are important as Europe may have to provide the money if it ever has to be returned to Moscow. The instruments are distinct, and the same euro has not literally been spent several times. Even so, Europe has addressed successive immediate crises by placing claims on future profits, budgets and reparations. There’s nothing crazy about it. Governments borrow all the time because urgent bills can’t always wait for tomorrow’s tax money. But clever financial tricks don’t make the political gamble vanish; they simply push the costs down the road. And sooner or later, someone will have to shoulder the risk if the promised reparations or government funds fail to cover the bill. Belgium holds the vault and the risk That responsibility leads to Belgium. Around €210 billion of Russian central-bank assets are immobilized in the EU, with roughly €185 billion held by Euroclear in Brussels. Belgium slammed the brakes on the earlier reparations-loan plan, fearing a legal nightmare: Russian lawsuits, massive damages claims or a sudden order to hand the money back. The plan effectively asked Belgian to carry the risk for Europe’s geopolitical experiment, but Brussels insisted that any potential liability had to be shared across the continent. The previous Commission proposal already went some way to recognizing that problem. It envisaged national guarantees divided according to each country’s share of EU gross national income, with coverage eventually moving to the EU budget. The catch was that governments still had to sign up voluntarily, raising fears that chunks of the plan could be left without cover. Belgium demanded ironclad protection against every legal and financial threat so that it wouldn’t be stuck picking up the tab. The letter puts the issue back on the table but stops well short of a deal. It offers no figure for the loan, no clear guarantee plan and no fix for Belgium’s objections. The four governments can force the issue back onto the agenda, but turning it into a workable plan will still require the backing of Europe’s biggest economies. Euroclear’s Brussels headquarters symbolizes the financial bottleneck holding billions in frozen Russian central-bank assets and Europe’s unresolved political liability debate. Photo by Jonathan Raa/NurPhoto via Getty Images Survival comes before reconstruction Poland’s Foreign Minister Radosław Sikorski makes a strong case for taking the gamble. “Russia will not get this money back until it pays reparations to Ukraine, so it is better to use it to stop the aggression, that is, to defend Ukraine, rather than wait until the end of Russia’s aggression to spend it on reconstruction,” he said. The logic is to spend the money now on air defenses, ammunition and Ukrainian weapons factories, and Ukraine may save its cities, power stations, factories and territory from destruction. Every building and piece of infrastructure left standing could mean a smaller reconstruction bill later. A stronger Ukraine could also have a better hand when peace talks eventually begin. Of course, nobody can put an exact price tag on the calculation. One euro spent on defense will not automatically wipe a fixed amount off the reconstruction bill. Ukraine will still need vast sums after the war, while the frozen Russian assets are limited. But the order matters. There can be no meaningful reconstruction if Ukraine does not survive as a sovereign, functioning country.