Esshan Kharat — May 5, 2026
It has been more than 1,500 days since Russia launched its full-scale invasion of Ukraine, and on May 4, both the Russian and Ukrainian governments announced unilateral ceasefires—competing ceasefires, that is. Russia had a ceasefire on May 8-9 for its Victory Day parade in Moscow, and Ukraine had its own from May 5-6. However, neither ceasefire was accepted by the other side, and amidst the tension, no clear end to the war seems to be in sight. As a result, the money fueling this war raises serious questions about its continuation.
At the European Council’s summit on December 18-19 late last year, the Council approved a €90 billion interest-free loan to Ukraine to help meet its budget needs from 2026 to 2027. The loan will be financed on EU capital markets through joint borrowing, which is a step away from the previously anticipated financing through Russia’s frozen assets. While Hungary, Slovakia and the Czech Republic are exempt from financing the loan, the remaining European states continued with funding, following through on Article 4 of the Treaty on the European Union.
Belgian Prime Minister Bart De Wever blocked a proposed “reparations loan” against Russia, backed by their frozen assets in the EU. Wever cited that Russia’s central bank has taken legal action against Euroclear, a Belgian-based financial market infrastructure provider. He feared that if the seizure of Russia’s assets was ruled as illegal in court, Belgians could face liability for the seizure and face serious financial repercussions. This supports EU Council President Antonio Costa’s statements regarding the EU’s respect for the rule of law, regardless of the benefit to the Union.
However, the €90 billion loan may fall short because the IMF estimates that Ukraine will need a total financing of nearly €137 billion throughout 2026. The remaining third of the required funds is expected to be covered by G7 partners. Notably, this excludes the United States because of President Trump’s seeming distaste for continually funding and supporting Ukraine.
In response to the loan and the EU’s financial decisions, Russian envoy Kirill Dmitrev celebrated the decision. Dmitriev remarked that the decision was a “Major blow to EU warmongers led by failed Ursula,” in reference to the President of the European Commission, Ursula von der Leyen.
Furthermore, President Zelensky thanked the EU but emphasized the importance of keeping Russian assets frozen. However, Ukraine’s Finance Minister, Serhly Marchenko, called the loan insufficient and said more work on reparations was needed. The German Chancellor, Friedrich Merz, supports this notion, stating that if Russia does not pay reparations, the EU is prepared to use Russia’s assets to pay them.
Leaders from at least seven nations, including Estonia, Finland, Latvia, Poland, Ireland, Sweden and Lithuania, backed a letter to Von der Leyen calling support for the reparations loan as a financially feasible solution.
On the other side of the globe, the Trump administration is working on developing a 28-point peace plan. The plan proposes that $100 billion from Russia’s frozen assets shall be invested in post-war reconstruction efforts in Ukraine, led by the U.S. The February 2026 proposal states that the U.S. will receive 50% of the profits from the effort. Furthermore, the plan hopes to slowly shift away from sanctions on Russia, reintegrating it into the global economy and even possibly returning to the G8.
One of the last times the U.S. formally met with Russia was when U.S. envoys Steve Witkoff and Jared Kushner met with the Kremlin in late 2025, with the meeting lacking significant progress. Furthermore, a bipartisan Senate sanctions bill had approval from President Trump in January 2026, but has yet to advance to a floor vote. The administration is also under speculation for attempting to rebuild U.S.-Russia relations regardless of the war’s conclusion.
Overall, Ukraine’s war efforts are financed and secured through 2027, but ambiguity still surrounds the war. The upcoming ceasefire windows provide an opportunity to sustain long-term fighting reduction, but it will be up to both nations to capitalize on that opportunity. Additionally, whether the U.S. formally ends support for Ukraine or whether Russian legal action against Euroclear succeeds remains up in the air. Finally, the reparations following the war are a question being posed across Europe, with an estimated €600 billion being required in reparations.
