ANALYSIS
Who pays for the war? Ukraine's debt, Russia's frozen assets and a rule Europe will have to bend
September 28, 2026 — Ukraine / European Union / Russia
The facts
On 24 August, Ukraine's Independence Day, Zelensky told the European leaders who had come to Kyiv that his country was short another 27 billion dollars to get to the end of the year. At the start of 2026 the expected defence deficit was about 7.5 billion. Within a few months it had become almost four times as large.
The request took Brussels by surprise. According to the New York Times, some European officials are privately asking whether the money is being spent well or whether the needs have been inflated. Kyiv has not yet published a full breakdown of the figure. At the end of September the European Commission and the International Monetary Fund are still trying to establish how big the hole really is and where it comes from.
Then there is 2027. The budget presented in September foresees a deficit of 15% of gross domestic product, public debt above 110% and security and defence spending equal to 43.8% of GDP. Ukraine will need 52.6 billion dollars from abroad; for 32.6 billion there is no funding today. Finance minister Marchenko called the situation the most difficult since 2022.
That is the news. The question the news leaves open is a different one: who pays, in the end?
Two different holes
They are worth keeping apart, because one was foreseeable and the other was not.
The 2026 hole concerns defence and blew up within a few months. Kyiv blames it on the intensification of Russian drone and missile attacks and on the strikes against logistics and the grain corridor, which in August, according to the chair of the parliamentary budget committee Roksolana Pidlasa, cost around half of the revenue expected that month. Its origin, however, is the subject of an internal political dispute: Zelensky says the defence ministry spent early the funds planned for the end of the year under the previous minister, Mykhailo Fedorov, who denies it and attributes the hole to projects of the new leadership.
The 2027 hole, by contrast, was expected. Already in the first review of the new programme, the Monetary Fund estimated Ukraine's unfunded need for 2027 at 43.4 billion dollars. And the European Union had stated as early as December 2025 that its 90-billion-euro loan would cover only two thirds of Ukraine's needs for the two years.
How the European loan works
In December 2025 European leaders could not agree on using Russia's frozen assets directly. They chose another route: a 90-billion-euro loan for 2026 and 2027, financed through joint EU borrowing and backed by the European budget. Twenty-four states take part: Hungary, Slovakia and the Czech Republic opted out.
Two thirds of the sum, 60 billion, go to defence; one third, 30 billion, to keeping the state running. Payments are conditional: if Kyiv backslides on the fight against corruption, disbursements are suspended.
The decisive point is the repayment clause. Ukraine will repay the principal only once Russia has paid war reparations. If Moscow does not pay, Ukraine is not required to repay anything, and the Union reserves the right to use the immobilised Russian assets to repay itself. In the meantime the interest is paid by the European budget: the Commission estimates it at about 1 billion euros in 2027 and about 3 billion a year from 2028.
This is not Europe's only claim on Kyiv. There are the emergency loans of 2022 (7.2 billion), the 2023 MFA+ programme (18 billion, to be repaid over 35 years starting in 2033) and the loan part of the Ukraine Facility (33 billion, repaid between 2034 and 2061). These are ordinary loans: Ukraine has to repay them in any case, while the interest is borne by the Union. Finally, there are 18.1 billion disbursed in 2025 under the G7 plan, which however are repaid with the proceeds generated by the immobilised Russian assets, not with taxpayers' money.
How much falls on each European
Let us try to do the sum as honestly as possible, stating the assumptions. The Union's population on 1 January 2026 is 452 million people according to Eurostat; that of the 24 states taking part in the 90-billion loan is about 426 million.
With the payment of 18 September, the Commission has disbursed almost 15 billion in 2026: that is about 35 euros per person. The 90-billion loan, fully disbursed at the end of 2027, is worth about 211 euros per person. The certain cost, the interest, will be about 7 euros per person every year from 2028, paid in any case and with no end date. All European loans to Ukraine together, excluding the G7 plan, come to about 340 euros per person: that is the ceiling of the exposure, if Ukraine repaid nothing.
There is another figure in circulation that should be kept separate. Since the start of the invasion, the Union and its member states have provided 216.7 billion euros of assistance in total, including military aid and support for refugees. That is about 480 euros per person, but it is mostly spending already incurred as grants, not a debt to be recovered.
One important clarification: the principal of the 90-billion loan does not automatically turn into taxes. If Russia does not pay, the Commission is ready to roll the debt over time. The certain cost, for now, is the interest.
Corruption: what is documented and what is not
Corruption at the top of Ukrainian power is real. On 10 November 2025 the National Anti-Corruption Bureau (NABU) and the Specialised Anti-Corruption Prosecutor's Office (SAPO) made public the scheme known as «Operation Midas»: kickbacks of 10-15% imposed on suppliers of Energoatom, the state nuclear company, for at least 100 million dollars. At its centre, according to investigators, is Timur Mindich, co-owner of the production company Zelensky founded before his presidency. The scandal led to the dismissal of two ministers and the resignation of the president's chief of staff, Andriy Yermak. Former energy minister German Halushchenko was detained in February 2026 while trying to leave the country. Other cases have reached parliament: five MPs from the ruling party were charged over bought votes, and Yulia Tymoshenko for offering bribes to colleagues.
But these cases concern kickbacks on contracts of Ukrainian state companies and institutions. To date no investigation has linked the 27-billion hole, or the funds of the European loan, to embezzlement. The phrase «vanished funds», which circulates widely, has no documentary basis today. What exists is a need not yet fully explained, under European review.
There is also another side to the coin. All these cases came to light because the anti-corruption agencies work. In July 2025 parliament passed a law limiting their independence; after the first mass protests since the start of the invasion, it withdrew it on 31 July.
Legal commentary
About 210 billion euros of the Russian central bank remain immobilised in the Union, mostly at Euroclear, in Belgium. Using them directly is the recurring temptation. But two rules of international law collide.
The first favours Ukraine. Armed aggression is prohibited by the Charter of the United Nations (Art. 2(4)), and the state responsible for an internationally wrongful act is obliged to make full reparation for the injury caused: this is the basis of the non-recognition of Russia's conduct that this site advocates. With resolution ES-11/5 of 14 November 2022 the UN General Assembly recommended the creation of a register of damage, established in 2023 within the Council of Europe. On 16 December 2025 in The Hague the Convention establishing an International Claims Commission was opened for signature: by 15 September 2026 it had been signed by 40 countries and ratified by nine, plus the European Union. It needs 25 ratifications to enter into force.
The second rule protects Russia. Central bank assets enjoy particularly strong protection from enforcement measures by other states. And the countermeasures a state may take against another that has breached international law must, as a general rule, be temporary and reversible: they serve to induce the wrongdoer to stop and make reparation, not to punish it for good. Freezing is reversible. Confiscating is not.
It is this tension that explains the shape of the 90-billion loan: using the Russian assets as de facto collateral, without confiscating them.
Anyone who fears that the treatment of Russian assets will push central banks in the rest of the world to trust the euro and the dollar less has a concrete indicator to watch. Between 2022 and 2024 central banks' net gold purchases exceeded one thousand tonnes a year, more than double the earlier level. According to an analysis by the European Central Bank, one central bank in four cites concerns about sanctions, or the expectation of changes in the international monetary system, among its reasons for holding gold. It is not a sudden flight: it is a gradual shift, already under way, and the BRICS explicitly condemn unilateral coercive measures in their latest declaration.
The symmetry test
Aggression paid for by the aggressor has happened before. After the invasion of Kuwait, the UN Security Council set up in 1991 a Compensation Commission funded by a share of Iraqi oil revenue. Claims worth 352.5 billion dollars were filed; 52.4 billion were awarded, about 15%. The last payment arrived on 13 January 2022, thirty years later. It is the precedent that shows the principle can work. But it worked because the Security Council was able to act, and today Russia holds a veto there.
A central bank's assets have also already been used by a Western state without the consent of the government claiming them. In February 2022 the United States blocked about 7 billion dollars of the Afghan central bank and set aside 3.5 billion for a fund based in Switzerland, for the benefit of the population, leaving the rest contested in American courts by the families of the victims of 11 September. The scale was much smaller, and the Taliban government was not recognised. But it shows that the rule of the untouchability of central bank assets, when convenient, already bends.
Editorial judgement
The European loan is presented as a loan. In substance it is a transfer whose repayment depends on an outcome of the war that no one can guarantee today. There are three scenarios, and usually only one of them is spoken aloud.
If Russia wins, reparations will never come and Ukraine will repay nothing. The bill will stay with Europeans.
If Russia loses, reparations may come through negotiation, as with Iraq, or through the use of the frozen assets. But using them without an agreement would mean bending one of the rules on which rests the very international order Europe says it defends, while others, as we wrote a few days ago, openly declare that they put their own interests before that order. It is a real contradiction, even though part of legal scholarship argues that aggression, by violating norms that protect the whole international community, justifies broader collective countermeasures.
The most likely scenario, however, is the third: a stalemate. No victory, no defeat, a frozen conflict. The Russian assets stay immobilised indefinitely, the loan is rolled over, and European taxpayers keep paying the interest with no end date. It is the scenario this loan seems designed for: it postpones decisions instead of taking them.
None of these paths is free. But hiding the bill behind the word «loan» does not help citizens decide whether it is worth paying, and decisions of this scale, as we have already noted on sending troops, need an informed mandate, not formulas that get around it.
Related pieces: BRICS in New Delhi: international law in the text, and who goes unnamed · Interests first, order second. And no nuclear power is pushing back · The stomach for war: who decides, and who pays · For the Non-Recognition of the Conduct of the Russian Federation · Anatomy of an interview: the American plan, Zelensky and a defeat presented as inevitable
Sources: Consilium — Ukraine Support Loan (4/2/2026) · European Parliament (2/2026) · European Commission (18/9/2026) · Consilium — EU financial assistance to Ukraine · European Commission — MFA+ · European Commission — MFA+ 2023 (19/12/2022) · Consilium — Ukraine Facility · VoxUkraine — Ukraine Facility · European Commission — G7 ERA (13/11/2025) · Euronews (20/12/2025) · RBC-Ukraine (27/4/2026) · Eurostat (10/7/2026) · Kyiv Post (9/2026) · UNN (9/2026) · EUalive (9/2026) · Interfax-Ukraine (9/2026) · Hromadske / New York Times (9/2026) · Femida (9/2026) · European Pravda via Yahoo Finance (9/2026) · Brookings — Operation Midas · NABU — 2026 report · Euronews (15/2/2026) · Kyiv Independent (4/2026) · UN — A/RES/ES-11/5 (14/11/2022) · Estonian MFA — Claims Commission (16/12/2025) · Ukrinform — ratifications (9/2026) · ILC — Articles on State Responsibility, 2001 · ECB — gold and geopolitics (6/2025) · Amundi Research Center (10/2025) · UN Security Council — UNCC (2/2022) · Congressional Research Service — Afghan reserves · American Journal of International Law (1/2023)
Verification note: the per-person figures are this site's calculations on data from the European Commission and Eurostat (1 January 2026); the population of the 24 states taking part in the loan is an estimate. Data as of 28 September 2026: the Commission's and the IMF's estimate of Ukraine's 2026 needs is still under way.