Four EU States Push “Plan B” as Brussels Struggles to Finalize Long-Term Ukraine Funding

A new split has emerged inside the European Union over how to finance Ukraine’s budget in the coming years, after Italy, Belgium, Malta, and Bulgaria jointly urged Brussels to slow down on its flagship plan to use frozen Russian state assets as collateral for large-scale loans to Kyiv.

In a document circulated to EU institutions — first reported by Politico and reflected in multiple news summaries — the four governments asked the European Commission and the Council to “continue exploring and discussing alternative options… with predictable parameters, presenting significantly less risks… based on an EU loan facility or bridge solutions.”

Their intervention lands just days before EU leaders attempt to finalize a financing package for Ukraine for 2026–2027, a period when Kyiv is expected to require tens of billions of euros to keep essential state functions running.

Plan A vs. Plan B: What’s at stake

Brussels has been promoting a long-term package built around a “reparations loan” backed by revenue from the roughly €210 billion in frozen Russian central bank assets held in Europe — most of them immobilized at Euroclear in Belgium. The idea is to allow Ukraine to borrow now, with the expectation that Russia will eventually be legally compelled to pay war reparations.

But Italy, Belgium, Malta, and Bulgaria argue that a safer alternative is Plan B: issuing joint EU debt, similar to the pandemic-era recovery fund, without tying new borrowing directly to Russian assets.

Although the four countries are not opposing support for Ukraine, their position reflects concerns about legal exposure, political feasibility, and long-term financial risk. Belgium in particular has warned publicly that because the bulk of the Russian reserves are held in Brussels, it faces heightened liabilities if the assets become part of a complex reparations mechanism.

Plan B’s own obstacles

While joint EU borrowing is seen by some governments as a cleaner option, it is also more politically difficult.

• Unanimity is required to authorize a new common-debt scheme — giving Hungary’s Prime Minister Viktor Orbán an effective veto.

• Critics caution that it would add to already high debt burdens in major EU economies such as Italy and France.

• Even if Hungary and Slovakia joined the four signatories, they would still fall short of the population threshold needed to form a blocking minority under EU qualified-majority rules.

As a result, the four countries cannot mathematically block Brussels’ preferred approach. Their opposition does, however, undermine the appearance of consensus that EU leaders hoped to project ahead of next week’s summit.

Italy’s coalition divisions surface

The document also highlights internal tensions within Italy’s governing coalition.

Prime Minister Giorgia Meloni has consistently supported sanctions against Russia and aid for Ukraine, aligning closely with NATO and most EU partners. But her coalition partner, Deputy Prime Minister Matteo Salvini, has taken a markedly Russia-friendly stance, publicly endorsing U.S. President Donald Trump’s proposed framework for ending the war and arguing Ukraine cannot achieve a military victory.

The four-country letter therefore reflects both Italy’s institutional caution and its coalition’s political split over the future of European support to Kyiv.

A new EU emergency rule raises further concerns

The dispute intensified this week after the EU approved a legal mechanism allowing the bloc to freeze Russian state assets indefinitely, removing the previous requirement for renewal every six months. This step dramatically reduces the risk that Hungary or Slovakia could later unblock the funds by vetoing an extension.

EU officials say the move strengthens the reparations-loan concept and diminishes Moscow’s leverage in any future peace settlement. It also prevents the Russian government from reclaiming the reserves as long as the war continues or reparations remain unpaid.

However, the same letter from Italy, Belgium, Malta, and Bulgaria expressed skepticism about relying on emergency legal powers to overhaul sanctions rules. According to Politico’s reporting, the four governments warned that the new mechanism could carry “far-reaching legal, financial, procedural and institutional consequences” extending beyond the Russian-assets case.

Although the governments voted in favor of the emergency rule to preserve EU unity, they stressed that the decision does not predetermine whether the assets can later be used as collateral, a matter that must still be decided at the level of EU leaders.

What comes next

EU leaders are set to meet on December 18, aiming to finalize a multi-year support package for Ukraine. While the bloc remains united in principle on long-term aid, differences over risk-sharing, legal durability, and the precedent of using immobilized sovereign assets have widened in recent days.

The four governments’ public dissent is unlikely to derail the final agreement but it raises political and legal pressure on the Commission as it seeks to avoid another prolonged financing battle — and to maintain Europe’s leadership role in sustaining Ukraine’s economy through 2026, 2027, and beyond.