How the European Union continues to support Ukraine financially is a matter for the boss. So Ursula von der Leyen didn’t miss the opportunity to present the legal texts on Wednesday with which a loan program of 90 billion euros is to be set up for the next two years.

This is not the solution that the Commission president fought for. The assets of the Russian central bank blocked in the EU should be used for this purpose. “Our proposal for a reparations loan remains on the table,” said von der Leyen. But that was just to save face after she and her running mate, Chancellor Friedrich merz, were unable to get their way at the European Council in December. Actually, commission officials were instructed not to pursue the project any further, as the FAZ learned.

The proposal that everything revolves around is called the “Ukraine Support Loan”. As was planned for a reparations loan, Kiev does not have to pay the interest and only has to repay the money if Russia pays at least the same amount of reparations in a peace agreement. Of course, this is not to be expected; nor is it part of the plans currently being negotiated. Ukraine actually receives the money as a subsidy.

The situation is different with the EU. It has to raise the sum on the capital market. This will be done in several tranches, a top official explained on Wednesday.Initially, this will result in interest costs of a good one billion euros this year and next. In the medium term, the official estimated interest costs at three to four billion euros if the entire sum of 90 billion euros has to be paid. That is the big difference to a reparations loan, which would have been interest-free.

Those 24 states that support the proposal as part of increased cooperation must now cover the costs. Hungary, slovakia and the Czech Republic do not take part. However, the costs could be covered from the current financial framework “if we end up finding money there,” as the official said.

This is not unlikely as Hungary, of all places, loses money every year because it has been blocked due to deficiencies in the rule of law. More than two billion euros have now been irretrievably lost. On top of that,the country has to pay a fine of one million euros every day; that amounts to almost 600 million euros. How member states deal with interest burdens from 2028 depends on the next financial framework.

The most critically important question on which the commission had to take a position on Wednesday concerned the use of the loan amount for weapons purchases. Two thirds,i.e. 60 billion euros, are earmarked for this. In principle, the “Buy european” rules should apply, which the legislators have already agreed on for the SAFE program – the 150 billion euros that will be used to support joint European armaments projects. Consequently,the proportion of components that are not manufactured in the EU,the states of the European Free Trade Association and Ukraine may not exceed 35 percent of the total value of weapons or ammunition.

Though, the proposed law provides for an critically important exception if, due to “Russia’s war of aggression against Ukraine, there is an urgent need for a specific defense item” and it is indeed either “not available to the required extent” or the delivery time of a third-party provider is “significantly shorter”. In such a case, Kiev can turn to the EU Commission, which will examine an exemption and recommend it to the 24 states. They then decide on this with a qualified majority.

This complicated procedure is a compromise between France on the one hand and Germany and many other countries on the other. Paris fundamentally refused to use European money to buy arms in the USA or the UK. berlin, on the other hand, insisted that Kiev can also procure urgently needed weapons, which come primarily from the USA. The Ukrainian government, as part of the so-called Ramstein Group, has estimated its need for such systems at at least $27 billion this year.This is particularly about spare parts and guided missiles for F-16 fighter aircraft, Patriot defense systems and the Himars artillery system.

In certain specific cases, such procurement would be possible from the support loan. However, it should remain the exception, which“`html