#FT: EU readies €20 billion plan B to fund Ukraine

The European Union is preparing a back-up plan worth up to €20 billion ($32.3 billion) for Ukraine, using a debt structure that sidesteps the objections of Hungary’s Viktor Orban about funding the war-torn country.

After EU leaders failed to agree a proposed €50 billion four-year package for Ukraine earlier this month, officials have searched for alternatives to save Kyiv from a looming budget crisis if the bloc’s differences cannot be resolved.

Officials involved in talks said one model funded by debt has gained traction as the most practical way to provide support if Mr Orban refuses to drop his veto at a planned summit on February

This scheme would involve participating member states issuing guarantees to the EU budget, enabling the European Commission to borrow up to €20 billion on capital markets for Kyiv next year, people briefed on the talks said. The precise terms are still under discussion and the final amount would be set according to Ukraine’s needs, they added.

The arrangement is similar to the structure used in 2020 when the commission provided up to €100 billion in cheap financing to EU countries for short-term work-support schemes during the COVID-19 pandemic.