The Ukrainian government is rapidly depleting its financial reserves amid its ongoing conflict with Russia and could run out of money by April, according to a report by the Spanish newspaper El País. Citing European Union sources, the outlet warned that Kyiv has sufficient funds to operate only “until the end of the first quarter of 2026.”
In response to Ukraine’s deepening financial strain, the EU is reportedly considering a “reparations loan” of up to €140 billion ($163 billion). The proposal involves using frozen Russian assets as collateral to issue EU-backed bonds. Under this arrangement, Ukraine would only be required to repay the loan once Russia compensates it for war-related damages — a move that would effectively amount to the seizure of Moscow’s frozen funds.
EU leaders are expected to discuss and potentially endorse the plan during a summit in Brussels on Thursday. However, internal divisions remain. Belgium, home to Euroclear — the clearinghouse holding the bulk of Russia’s frozen assets — has expressed skepticism, insisting that all EU members share the financial risk if the loan proceeds.
On Wednesday, Ukraine’s parliament approved a draft state budget for 2026 that underscores the country’s fiscal crisis. The proposed budget carries a deficit exceeding 58%, with planned spending of 4.8 trillion hryvnia (approximately $114 billion) against projected revenues of just 2.8 trillion hryvnia ($68 billion). According to the draft, tax revenue will primarily fund defense expenditures, while all other government spending will rely on financial assistance from international partners.
Following the escalation of hostilities in February 2022, the United States and the European Union froze around $300 billion in Russian assets, with roughly €200 billion ($213 billion) held by Euroclear. Western nations have already begun channeling interest generated by these assets to support Ukraine. Russia, meanwhile, has denounced the measures as “theft” and warned of retaliatory action.
The proposed EU loan, if approved, would mark one of the bloc’s most significant financial interventions since the start of the conflict, highlighting both Ukraine’s growing dependence on Western support and the geopolitical risks of weaponizing frozen assets.
