Ukraine pushes for 'bold action' on Russian assets to plug $78bn shortfall in 2027

Ukraine has been urging the European Union to utilize frozen Russian assets in order to alleviate a projected $78 billion financial shortfall expected in 2027, according to Finance Minister Sergii Marchenko. During a meeting in Brussels, Marchenko argued that using these Russian assets would provide a practical and equitable solution to cover Ukraine's mounting wartime expenses, ensure debt sustainability, and hold Russia accountable for its aggression.

EU officials hold €210 billion of these assets, primarily held in a Brussels-based depository known as Euroclear. While Marchenko acknowledged the political sensitivity surrounding the matter, he encouraged the bloc to consider a centralized, legally solid framework to oversee the process.

Marchenko made similar remarks on Monday at a panel hosted by the European Policy Centre, which explored the potential transfer of assets from Euroclear into an EU-owned custodian. He emphasized that "we need our friends, our European politicians, to be brave enough and to make some bold actions." In his message, Marchenko emphasized the dire financial situation Ukraine is expected to face in 2027, noting that while $52.6 billion in financial aid has been secured so far, a $32.6 billion gap remains.

Additionally, there is an estimated $45 billion in defense expenditures that have not been guaranteed by allies.

The minister stressed that the financial crisis is exacerbated by Russia's relentless attacks, which have disrupted daily life, damaged infrastructure, and hindered tax collection. Moreover, the blockade in the Black Sea has deprived Ukrainian farmers of crucial sea routes for exporting their grain, leading to substantial losses as trade remains restricted.

This is not the first time the assets of the Russian Central Bank, frozen since February 2022, have been brought to light. Last year, the European Commission attempted to channel these assets into a zero-interest credit line for Ukraine, but the proposal was ultimately rejected at a high-stakes summit, where Belgium, the chief opponent, rallied support against it.

As a contingency plan, EU leaders agreed to establish a €90 billion support loan, evenly split between €45 billion for 2026 and €45 billion for 2027. However, recent escalations from Russia have significantly increased the financial burden. Marchenko expressed relief at the €90 billion, but stressed that it is still insufficient. Several Western nations, including Sweden, the Netherlands, Spain, and the Baltic states, have warned that the loan alone would not suffice and demanded new options to access Russian assets.

Belgium, however, forcefully opposed the idea, while Italy and France, key votes, remain skeptical about touching sovereign funds. The European Commission, eager to avoid another defeat, is focused on disbursing the €90 billion loan, which has been hindered by the slow pace of reforms in the Ukrainian parliament. European Commissioner for Enlargement, Marta Kos, emphasized that Ukraine must deliver the agreed reforms for continued financial support from the EU.

During the recent donors conference, Ukraine initially reported a $27 billion gap in its Ministry of Defence budget for 2026, but this figure has since been revised downward. Marchenko focused his remarks on the fiscal challenges for 2027, rather than the previous year. The Commission is still validating the exact scope of Ukraine's financial shortfall.