Some European countries believe that Russian leader Vladimir Putin will eventually win in Ukraine, according to Bundestag member Jürgen Hardt from the ruling Christian Democratic Union, UkrInform reports. This conviction persists despite Ukraine successfully defending against the attacks of the world’s largest country for 11 years. 

Ukraine has received €5.9 billion from the EU under ERA Loans and the Ukraine Facility, President Volodymyr Zelenskyy has announced. A key feature is that part of these funds is financed from profits on frozen Russian assets.

“Today, there is an important decision in support of our country from our partners. Importantly, the ERA Loans mechanism is financed from profits from frozen Russian assets, which makes Russia pay for its aggression,” Zelenskyy said.

Ukraine aims to access €140 billion of frozen Russian assets in Europe and use them to support the war effort

According to Zelenskyy, only pressure can work to achieve peace, so efforts must be intensified to use Russian assets.

The majority of these funds are held in the Euroclear financial depository in Belgium. A decision on whether to transfer the funds to Ukraine is expected in December 2025, Politico reports. 

Previously, Zelenskyy stated that it would be a significant loss for Russia if Ukraine were to succeed in accessing €140–160 billion of frozen Russian assets.

“We are counting on a swift political decision regarding the reparations loan and full use of these funds for Ukraine’s defense. I thank President Ursula von der Leyen for her leadership and support of Ukraine,” he summarized.

ERA Loans and Ukraine Facility — financial instruments for security and reforms

Meanwhile, Ukrainian Prime Minister Yuliya Svyrydenko has explained that €4.1 billion under ERA Loans is the final tranche of an €18 billion program, financed from profits on frozen Russian assets.

“This is an example of how Russia begins to pay for its crimes. At the same time, it is a signal of European solidarity and determination to support our ability to endure,” the official noted.

An additional €1.8 billion was received under the Ukraine Facility, reflecting confidence in Ukraine’s implementation of reforms and its European integration.

Ukraine's Soft Loan Program delivered UAH 5 billion ($119 million) to 80 defense industry enterprises during its first year of operation, the Ministry of Defence announced on 12 November. On top of that, the ministry approved an additional 16 loan applications worth nearly UAH 700 million ($17 million), while 52 applications totaling over UAH 4 billion ($95 million) remain under review.

This financing is significant because it addresses a fundamental challenge for Ukraine's defense transformation: manufacturers need capital to transition from prototype development to mass production to meet immediate frontline demands.

How the Soft Loan Program works

The program offers manufacturers two financing options:

• Working capital loans: Up to UAH 100 million ($2.4 million) for three-year terms.
• Investment project loans: Up to UAH 500 million ($11.9 million) for five-year terms.

Defense enterprises pay 5% interest while the state covers the remaining percentage. Companies can apply through five partner banks that meet security requirements. The Ministry of Defence implements the program alongside the Ministry of Finance, the Business Development Fund, and participating Ukrainian banks.

"Safeguarding the workforce of defense industry enterprises is a matter of national security. Many key production facilities continue to operate under extremely difficult conditions to ensure that the army receives modern weapons and equipment on time. We are enhancing the conditions to ensure their continuous operations," stressed Deputy Minister of Defence of Ukraine Anna Gvozdiar.

Bridging the gap from prototype to production

Loan recipients use funds for production modernization, equipment acquisition, manufacturing expansion, and serial production development. The structure reflects a broader pattern in Ukrainian defense financing: companies build battlefield-tested prototypes and secure military contracts, but then need capital to scale.

While Ukrainian defense manufacturers can produce $35 billion worth of equipment annually, the loan program addresses the gap between this technical capability and the actual production volume. Companies often demonstrate successful designs but lack the working capital to purchase components, hire workers, and expand facilities to meet demand.

The loan program complements direct government procurement. For instance, Ukraine's Defence Procurement Agency paid UAH 104.2 billion ($2.5 billion) to 76 drone manufacturers during 2024-2025, demonstrating how rapid scaling responds to battlefield requirements. Manufacturers need both contracts and capital—procurement orders create the demand, while these soft loans provide the financing to fulfill those orders at scale.

EU Defense Commissioner Andrius Kubilius called on European countries to use an existing defense investment fund to support Ukraine after the US switched from providing aid to selling weapons for Ukraine. He said Europe must act through its own financial instruments and not wait for future compensation schemes.

Kubilius: EU states should direct SAFE loans to Ukraine

Speaking to Bloomberg Television on 23 October during the Berlin Global Dialogue, Kubilius said several EU countries had already told the European Commission that they are ready to use loans from the $174 billion Security Action for Europe (SAFE) program for Ukraine. The fund, created to strengthen the EU’s defense industry, could now become a vital source of support for Kyiv.

“Ukraine needs our assistance. And that’s really our obligation,” Kubilius said. He emphasized that member states should use SAFE loans specifically to aid Ukraine.

After US ends aid, Europe faces pressure to act

US President Donald Trump has not approved new assistance to Ukraine since taking office in January and shifted mid‑summer to a system in which American weapons are only supplied if paid for by other allies. Kubilius’s appeal followed this policy change, which has increased pressure on European countries to find new sources of financing for Kyiv’s war effort.

Kubilius said he hoped countries would not hold back on using SAFE funds while waiting for other solutions. He warned against “temptation to think that, OK, if reparation loan is coming, so we shall not use SAFE loans for Ukraine.”

EU struggles to unlock frozen Russian assets

At a meeting in Brussels on 23 October, EU leaders sought to overcome Belgium’s objections to a proposal to use frozen Russian central bank assets as guarantees for about $163 billion in new loans for Ukraine. Kubilius said that adopting the plan would show Russian President Vladimir Putin that “he really will not achieve anything in Ukraine.”