EU summit: Leaders demand all hands on deck to fund Ukraine aid package

Every EU member state should contribute to a new package of financial support for Ukraine required to help fill a €70 billion hole in Kyiv’s budget for the coming year, several leaders insisted during a summit in Dublin on Friday.

The red line drawn by German chancellor Friedrich Merz and other European prime ministers on the need for a collective approach tees-up a clash inside the EU with nationalist governments resistant to sending money to Kyiv.

Ukraine is facing the huge deficit in its 2027 budget due to the war that has been going on since Russia’s full-scale invasion in February 2022. EU leaders will be asked to cover €45 billion of the shortfall. The UK, Norway, Canada and a handful of other western allies will stump up the remainder.

“We are open to discuss all solutions to help Ukraine to survive this winter,” Sweden’s prime minister Ulf Kristersson told reporters in Dublin.

The war in Ukraine hung over the summit of EU leaders in the Convention Centre on the second day of top-level political meetings in the capital as part of Ireland’s presidency of the Council of the EU.

A new EU-backed loan to make up the shortfall in Ukraine’s wartime finances is an option favoured by many governments.

Taoiseach Micheál Martin said borrowing as an EU bloc appeared to remain the “most effective” way to raise the tens of billions of euro required. “That doesn’t mean that’s the way it’s going to be forever,” he said.

Kristersson made it clear all 27 member states would have to throw their weight behind a new financial aid package. “We cannot accept that some countries say that they simply would opt out from taking part ... I think that is totally unacceptable,” he said.

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Three EU member states – Hungary, Slovakia and Czech Republic – refused to participate in a previous €90 billion loan the other EU countries agreed to raise for Ukraine last December.

The EU borrowed the money as a bloc, the first time leaders agreed to take on European debt as a collective to finance its support for Ukraine.

Viktor Orban, Hungary’s far-right then prime minister, did not object to other EU countries pursuing the loan plan, on the basis his central European country got to sit it out and not pay.

Two other populist leaders hostile to sending aid to Ukraine, Slovakia’s Robert Fico and Andrej Babis, the Czech Republic’s leader, adopted the same stance.

Orban’s Kremlin-friendly government was swept from power by Peter Magyar in elections this year. Magyar has taken steps to repair relations with Brussels, but remains sceptical about sending aid to Ukraine.

Bulgaria’s new prime minister, Rumen Radev, has said his country will not take part in any common EU loan.

There is a push to tie any deal on the EU’s next long-term budget to an agreement on financial assistance for Ukraine.

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Those opposed to taking part in a new loan – Hungary, Bulgaria, the Czech Republic and Slovakia – are all net beneficiaries of the union’s common budget, between agricultural subsidies or regional development funding.

The previous EU loan to fund Ukraine was backstopped by €210 billion in Russian central bank assets. The Russian money has been frozen inside European financial institutions by Brussels sanctions placed on Moscow following the 2022 invasion.

The terms of the loan would allow European countries, in principle, to recoup the funds they borrowed from those Russian assets.

Speaking in Dublin, Latvia’s prime minister Andris Kulbergs questioned why Europe did not tap the Russian assets directly to replenish Ukraine’s coffers.

Kulbergs, whose small Baltic nation borders Russia, said the EU should not be reaching into its own pockets when there was a pile of Russian cash “lying on the ground”.