The last-ditch agreement by European governments early Friday to jointly borrow €90 billion to loan to Ukraine came together only as the result of an obscure and seldom-used tool that allowed leaders to side step a unanimous decision — potentially setting a new standard for how the European Council operates.
To get the unexpected joint-debt proposal over the finish line, officials relied on the European Union’s “enhanced cooperation” mechanism. It allowed Hungary, Slovakia and the Czech Republic to opt out of the deal without vetoing the plan, while the bloc’s other 24 member states signed on in order to fund Ukraine for two years starting in early 2026.
“I think this is a precedent-setting decision where more and more decisions will be taken by enhanced cooperation,” Juraj Majcin, an analyst at the European Policy Centre, told The Parliament.
Majcin said the move shows that the Council — comprised of the leaders of the EU’s national governments — can take difficult decisions going forward without needing to reach a full consensus, or unanimity, across member states.
The decision to issue joint debt to fund Ukraine’s military defence against Russia’s nearly four-year-long war of aggression came after EU leaders failed to reach an agreement on a more ambitious plan to use frozen Russian assets to assist Ukraine. That was largely down to the stiff resistance of Belgian Prime Minister Bart De Wever.
Belgium, home to securities depository Euroclear, which holds around €185 billion in immobilised Russian assets, sought “unlimited” guarantees from fellow member states before it would give the plan its blessing. That proved a bridge too far for many other EU countries.
In the hours after the EU’s Plan B was announced, opinion has been divided. The failure to reach a deal on tapping Russian assets led some analysts and experts to quickly call the summit outcome a failure for Europe. Others saw it as an unbridled victory for Ukraine, as the US continues to pull back support and Russia makes battlefield advances.
The reality is likely more nuanced.
“I do not believe that this summit is either a victory or a defeat for the European Union,” said Ricardo Borges, a non-resident fellow at the Hellenic Foundation for European and Foreign Policy. “Issuing joint debt is not an ideal solution, but it is the one that allows us to continue supporting Ukraine.”
He added: “A defeat would have been if no agreement had been reached.”
For Jean-Louis De Brouwer, director of the European Affairs Programme at the Egmont Institute, the decision also normalises the idea that the EU can — and should — resort to joint borrowing in times of crisis.
“One thing seems clear: borrowing will become increasingly inevitable despite the ‘never again’ that followed the post-pandemic recovery funds,” he told The Parliament.
The joint-debt route also “means that financial risks are equitably distributed among the member states, and it stays clear of any legal issues regarding the status of the frozen Russian assets,” Manuel Müller, a senior research fellow at the Finnish Institute of International Affairs told The Parliament.
Still, it’s unclear how much appetite national publics across the bloc will have for raising joint debt, particularly when it comes to supporting Ukraine.
According to a recent report by the Kiel Institute, disparities among member states in their financial support for Ukraine have widened this year, with Nordic countries providing the bulk of the funding, while large southern economies such as Spain and Italy contributed very little.
“The latest polls suggest that awareness of the scale of the security challenge is uneven across EU societies, which could make it harder for leaders to build broad domestic support for common borrowing, despite the strategic rationale,” Tinatin Akhvlediani, a research fellow at Centre for European Policy Studies told The Parliament.
EU keeps door open to using frozen assets
In the run-up to Thursday’s 16-hour summit, which wrapped up around 3:00am on Friday, EU diplomats had insisted that the only solution on the table was the use of frozen Russian assets to issue a so-called reparations loan for Ukraine. But facing persistent Belgian opposition, leaders were forced to pivot at the 11th hour.
Earlier on Thursday, Ukrainian President Volodymyr Zelenskyy had reiterated to his European counterparts in Brussels that, in the absence of US financial support, Ukraine would face a funding gap of at least €45 to €50 billion next year. Without additional aid by the spring, he warned, Kyiv would be forced to make deep and critical cuts to its defence budget.
The urgency of supporting Ukraine amid ambiguous US backing ultimately led to the decision to jointly borrow €90 billion on the capital markets.
While the move was welcomed by De Wever and Italian Prime Minister Giorgia Meloni — who reportedly faced pressure from Washington not to tap the Russian funds — the Plan B was a setback for German Chancellor Friedrich Merz and European Commission President Ursula von der Leyen, both of whom lobbied intensively to use the frozen assets.
However, the official summit conclusions made clear that Russian assets will remain frozen and could ultimately be used to repay the loan should Moscow refuse to pay reparations to Ukraine once the war ends.
“The core logic — keeping Russian assets frozen and linking them to future reparations — remains intact, even if the mechanism is less ambitious than initially envisaged,” Akhvlediani said.
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