Loan to Ukraine: Risk of Kyiv Exhausting Its War Funds Averted

Editorial

16:36 JST, December 20, 2025

The European Union has agreed on new support measures for Ukraine, which is facing Russian aggression. It is highly significant for the EU to secure immediate war funds by overcoming differences among its member states.

The main pillar of the aid package, which received unanimous approval at the EU summit, is to provide Ukraine with more than ¥16 trillion in interest-free loans over the next two years. Excluding Hungary, Slovakia and the Czech Republic, countries of the 27-member bloc are set to jointly borrow necessary funds from financial institutions.

Ukrainian President Volodymyr Zelenskyy had strongly called for financial support, saying that Ukraine will fall into a fiscal deficit nearing ¥9 trillion next year if the current situation remains unchanged, and that the production of drones deployed on the front lines will be severely impacted.

Russian forces are intensifying their offensive in the Donbas region in eastern Ukraine. It is essential for Ukraine to raise war funds to prevent deeper invasion into its territory. The EU’s substantial support is also critically important to protect the livelihoods of the exhausted people of Ukraine.

The EU froze about ¥38 trillion worth of Russian state assets held in the bloc as part of sanctions against Russia in response to its aggression against Ukraine. Initially, the EU planned to use these frozen assets for loans to Ukraine.

However, Hungary and others opposed this idea, and Belgium — where a large portion of the frozen assets have been held by a clearing house based in the country — also maintained a cautious stance due to concerns over potential retaliation and lawsuits from Russia.

Indeed, the Russian central bank has filed a damages lawsuit with a Moscow court against the Belgian clearing house, claiming it suffered losses from the asset freeze by Western countries. The EU ultimately abandoned plans to use the frozen assets and switched to joint borrowing.

If the rift within the EU deepens, it will only benefit Russia. It is hoped that the EU will advance discussions on how it will continue supporting Ukraine.

Russia’s aggression has continued for nearly four years. It is true that aid fatigue has spread among EU member states. Countries outside Europe, such as Japan, also need to work together by implementing support measures within their capabilities.

Above all, it is essential that the United States continues to support Ukraine and increases pressure on Russia.

However, the administration of U.S. President Donald Trump suspended support for Ukraine this year at one point. Its national security strategy, released earlier this month, stressed the need to rebuild strategic stability with Russia and failed to condemn Moscow’s aggression.

Worse still, the Trump administration criticized the EU, claiming that the bloc has obstructed U.S.-led ceasefire negotiations between Ukraine and Russia. Excluding European countries will likely prevent Trump’s desperately sought-after ceasefire from materializing.

(From The Yomiuri Shimbun, Dec. 20, 2025)