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A Europe-wide trend is emerging: more and more politicians are campaigning on the claim that the financial burden of the war in Ukraine is unsustainable. All this is happening at a decisive moment, when Europe must assume full responsibility for financing a war in Ukraine that is slowly approaching the duration of the two world wars, as Washington retreats into the background. This, in turn, severely tests the political deal-making skills of EU leaders – honed for more than 15 years by Viktor Orbán and his populist counterparts – together with the EU’s legal frameworks.
At the year-end EU summit on 18–19 December, either an agreement is reached on the resources enabling the financing of the Ukrainian economy and military operations, or Europe could once again weaken its defensive position, doing Vladimir Putin’s Russia another favour.
A key question, as the German government has already hinted behind closed doors in recent days, is whether it will be possible at the EU summit to use legal manoeuvring to pre-empt a likely veto – based on the Hungarian government’s approach over the past four years to joint Ukraine-related issues (a veto that the Slovak government may also join).
An important development is that on the evening of 11 December, ambassadors sitting in the European Council – representing national governments in EU decision-making – announced that they had agreed on a revised version of a proposal under Article 122 of the Treaties. The decision was taken by a “very clear majority,” according to Denmark’s Council presidency. This decision makes it impossible for a member state to lift sanctions against Russia. Until now, these punitive measures have been extended every six months, and each such decision required unanimity among the member states.
This matters now because the EU intends to provide loans to Ukraine backed by €210 billion in frozen Russian banking assets. That would become impossible if, due to opposition from even a single member state, the sanctions could not be extended. In that case, the banking assets would have to be returned to Russia, and the collateral for Ukrainian loans would disappear.
The background to this decision is that on 3 December the European Commission published its proposals to allow the lawful use of interest on seized Russian assets to finance Ukraine. The Commission’s legal service outlined viable options to cover financing needs for the 2026–2027 period: joint EU borrowing and a new Reparations Loan.
The above-mentioned Council agreement is particularly significant in light of the Hungarian veto, as the Orbán government already signalled to the press on 5 December that it officially rejects the European Commission’s option of issuing common eurobonds. Hungary does not support issuing eurobonds to finance a €165 billion loan for Ukraine’s support.
All this comes against the backdrop of up-to-date data from the Kiel Institute’s Ukraine Support Tracker, which shows that Hungary spends relatively little on supporting Ukraine, despite – or perhaps precisely because of – the proximity of the war in the neighbouring country. This contrasts sharply with the comparatively less affluent Baltic states and the Nordics, which shoulder the greatest burden relative to their GDP. Poland, the Czech Republic and Slovakia are also exceptionally generous in the “middle band,” while in absolute terms Germany and France provide the most support.
Among international lenders and donors, however, there is little debate about the urgency of guaranteeing continued support for Ukraine. In its statement of 26 November 2025, the International Monetary Fund (IMF) does not mince words: “Prompt action by donors is indispensable to avoid liquidity strains.”
The IMF also stresses that Ukraine’s fiscal and external financing needs are large, and that risks are “exceptionally high” due to the duration and intensity of the war and fluctuations in donor support. Meanwhile, the World Bank provides a concrete figure, estimating Ukraine’s external financing needs for 2025 at €37 billion – in other words, securing financing from early 2026 onward is urgent.
Fresh figures from the Kiel Institute also sound the alarm over the drastic decline in military and defence support in 2025. Ukraine is facing one of the years with the fewest new aid decisions since the outbreak of the war in 2022. Europe has allocated only about €4.2 billion in new military aid to Ukraine – far too little to offset the halt in US support, warns the Kiel Institute’s analysis. At the same time, disparities within Europe have widened. France, Germany and the United Kingdom have significantly increased their allocations, but in relative terms they still lag behind the Nordic countries. By contrast, Italy and Spain have contributed only minimally.
It is also worth noting that Germany provides the most funding for air-defence systems and tanks, while Poland, the Czech Republic and the Baltic states have delivered the largest quantities of heavy weapons.
The reality, however, is that refugee costs weigh particularly heavily on Germany, Poland, Romania and the Czech Republic, though most governments typically account these expenses in their own budgets under “social policy” and “education” lines.
But let us take a closer look at these enormous sums to gain clarity.
How much does Ukraine cost the EU?
According to an October 2025 overview by the European Parliamentary Research Service (EPRS), EU institutions and the 27 member states together, as “Team Europe,” have mobilised around €177.5 billion in financial, military and humanitarian support for Ukraine since February 2022.
This includes macro-financial assistance and the €50 billion Ukraine Facility for 2024–2027, of which €38.27 billion is direct budget support, mainly through concessional loans. Added to this is military assistance, which the EPRS estimates at around €63–65 billion when including member-state deliveries and payments from the European Peace Facility (EPF).
Finally, refugee support is the item that the public rarely associates directly with Ukraine, yet based on data from the Kiel Institute’s Ukraine Support Tracker, the EPRS estimates EU member states’ refugee-related expenditures at around €155 billion between early 2022 and August 2025.
If everything is added together – EU budget programmes, military aid and refugee costs – Ukraine’s “price tag” for the EU so far is in the order of €330 billion over 3.5 years. On an annual basis this is around €90–100 billion, while the EU-27’s GDP in 2024 was well above €15,000 billion – meaning the bill amounts to roughly 0.6–0.7 percentage points of economic output per year.
EIB and EBRD: the EU’s “development wartime economy”
Beyond classic budgetary items, it should not be forgotten that EU financial institutions are also key players in financing Ukraine. According to a July 2025 statement by the European Investment Bank (EIB) Group, since the start of the Russian invasion it has mobilised €3.6 billion in support and loans for Ukraine – mainly for energy infrastructure, transport and SME financing.
The European Bank for Reconstruction and Development (EBRD) is Ukraine’s largest institutional investor during the war: at the 2025 Ukraine Recovery Conference in Rome, it reported wartime financing reaching €7.6 billion and aims to maintain an annual level of €1.5–2 billion.
These figures do not represent “extra luxury investments” but primarily power plants, bridges, urban district-heating systems, border crossings, and the survival of small and medium-sized enterprises – in other words, everything without which a frontline country would quickly become a permanently unstable, collapsing neighbour.
EU vs. the US: who really pays for Ukraine’s war?
The transatlantic “who pays more?” debate is politically convenient, but according to the latest data Europe has already moved from being a free rider to becoming the main financier earlier this year. According to the Kiel Institute, since 2022 EU institutions and member states together have committed around €165.7 billion in support to Ukraine, while the United States has provided about €130.6 billion.
The EPRS also highlights that by 2025 Team Europe had overtaken the United States in total allocated financial, humanitarian and military support.
In military equipment, EU member states have also allocated slightly more to Ukraine this year than Washington: €65.1 billion compared with €64.6 billion from the US, alongside a further €32.8 billion in European pledges.
The picture is more nuanced, however, as a larger share of US support consists of grants, while around 75% of EU financing takes the form of concessional loans with long grace periods and interest subsidies. Admittedly, this means lower immediate costs, but the EU assumes greater long-term financial risk – partly based on the expectation that the loans will ultimately be repaid from Russian assets or “war reparations loans.”
Which would cost more: a Ukrainian victory or a Russian breakthrough?
Paradoxically, the strongest argument against the claim that “financing Ukraine is too expensive” is to outline how costly it would be not to pay.
A recent study by the Norwegian, civil-funded analytical firm Corisk and the Norwegian Institute of International Affairs (NUPI) provides a clear framework by comparing two scenarios:
Scenario 1 – Russian (partial) victory: Moscow pushes the front westward, Ukraine is forced to accept a “bad peace” and loses up to half of its territory. According to the study, this would impose €524–952 billion in refugee and social costs on Europe over four years, plus additional defence spending, bringing the total bill to €1.2–1.6 trillion.
Scenario 2 – Ukrainian victory: Europe arms Ukraine (1,500–2,500 tanks, 2,000–3,000 artillery systems, up to 8 million drones, modern air defence), enabling it to push back Russian forces and force the Kremlin into a favourable peace. Researchers estimate the cost at €522–838 billion over four years – roughly half of what Europe would pay in the event of a Russian victory.
The study also assumes a reduced role for the United States, meaning that the bulk of the burden – as today – would fall on Europe.
How much would it cost if Russia attacked a NATO member?
There is no direct, official EU calculation of the cost of an actual NATO war, but there are approximate estimates of what European defence would require even in the event of a US withdrawal.
According to a 2025 analysis by the Brussels-based think tank Bruegel, if Europe had to deter Russia without the United States, it would need at least 300,000 additional troops and around €250 billion in extra defence spending annually in the coming years.
According to the Norwegian study cited above, additional defence spending to reinforce NATO’s eastern flank in the event of a Russian war against NATO would raise Europe’s total costs under Scenario 1 to €1.2–1.6 trillion.
This alone already exceeds what the EU currently spends in total on supporting Ukraine – and this calculation does not even include potential infrastructure destruction in the Baltic or Scandinavian theatres, nor new waves of refugees.
👉 Original article and longer version on HVG
🤝 This article was written as part of a cross-border European journalistic collaboration within the EU Neighbours East project
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