EU Leaders Park Ukraine’s €70 Billion Gap Until November

EU leaders left Brussels on 16 October with no deal on the 2028 to 2034 budget and a €70 billion hole in Ukraine’s 2027 war chest. Volodymyr Zelenskyy told them the war will cost €155 billion next year and that he needs at least €70 billion more from the Union for defence, weapons and resilience.

The next hard date is not December. It is António Costa’s special summit on 26 November, three days before Spain votes.

A €70 Billion Ask the 2026 Loan Cannot Cover

Zelenskyy came to the 15 and 16 October European Council after a public row with U.S. President Donald Trump, who called him harder to deal with than Vladimir Putin and labelled Kyiv’s strikes on Russian oil refineries a disgrace. Leaders closed ranks, promised to keep sanctions in place, and gave the Ukrainian president the warmer room.

The bill arrived with him. Last December’s €90 billion support loan was built as a two-year bridge. Costa told reporters after the meeting that the means to cover 2026 have been identified. He then said leaders had asked the European Commission for a proposal on extra needs in 2027. That is the year Zelenskyy put at €155 billion, with a request for at least €70 billion more from the EU.

He posted the ask from the same address.

The war will cost 155 billion euros next year. And we need at least 70 billion euros more from you – for defense, for weapons, and for our resilience. This is a realistic amount. And I ask you to find this support. It will help us hold Russia back.

There are some very simple… pic.twitter.com/OcIthdiNlD

— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) October 16, 2026

He also said Ukraine could make two or three times more drones if the money were there, and that those drones already stop most Russian assaults, cut supply lines and hit Russia’s economy. The political reading around that clip is blunt: Europe is being asked to write a cheque Washington is no longer writing. That argument does not fade when the family photos do. It follows Costa into November, when he has to find both a budget and a 2027 top-up.

This is no time to withdraw the support to Ukraine. This is no time to relieve Russia’s sanctions.

António Costa, President of the European Council, Brussels, 16 October 2026

He told Zelenskyy the Union’s support was as strong as ever and that Kyiv could count on it, including on the path into the EU, after two more accession clusters opened this week. Standing with Zelenskyy is cheaper than paying him. The conclusions welcome payments under the existing loan and stop short of naming a new figure.

Costa’s November Summit Collides With Spain’s Vote

On 5 October, Pedro Sánchez, Spain’s prime minister, general election for Sunday, 29 November after informing the head of state and dissolving parliament. The campaign runs from 13 to 27 November. Costa’s special budget meeting on 26 November therefore sits inside the last days of that campaign, with polling day three days later.

Spain is a large cohesion and farm-policy voice. A caretaker Sánchez, or a new majority, will not be the same interlocutor in the last mile of a seven-year budget. A Sigma Dos poll put the PP and Vox on a combined 203 seats in the 350-seat Congress, against 112 for the Socialists and Sumar. Those numbers can move. The calendar cannot.

THE ROAD TO 29 NOVEMBER

1. 5 October 2026: Sánchez calls Spain’s snap election for 29 November.
2. 8 and 9 October 2026: Trade talks in Beijing produce a shared understanding on Chinese hybrid car exports.
3. 10 October 2026: Ireland, holding the Council presidency, publishes its revised budget negotiating box.
4. 15 and 16 October 2026: European Council in Brussels. No MFF deal. Zelenskyy asks for at least €70 billion more for 2027. Costa is invited to take the budget talks on.
5. 22 October 2026: Spain’s temporary border checks are due to lapse, the date Italy has aligned to.
6. 26 November 2026: Costa’s special summit, inside Spain’s campaign.
7. 29 November 2026: Spain votes.

Costa has said a new budget cannot start on 1 January 2028 unless leaders approve it by the end of 2026, so that the laws can pass in 2027. The official conclusions still use that clock. They also refuse to lock a December night. Net payers and the southern and eastern cohesion camp remain far apart, and 2027 brings votes in other large states. A miss in December does not freeze the file. It hands it to a different set of governments.

Dublin Cut €141 Billion and Nobody Signed

Ireland circulated its revised negotiating box on 10 October, five days before leaders sat down. The presidency put the overall volume at €1.62 trillion, which it called a 30% rise on the current framework and 1.16% of EU gross national income, or 1.05% once repayment of Next Generation EU common debt is stripped out. To move the frugal camp, Dublin also advertised €141 billion in savings on the Commission plan, an 8% cut spread across headings.

THE IRISH NEGOTIATING BOX, 10 OCTOBER

Thomas Byrne, Ireland’s minister of state for European affairs, said the box was meant to bridge differences and move talks toward a deal before the end of 2026. Helen McEntee, the foreign minister, urged capitals to leave their opening positions. Taoiseach Micheál Martin called the paper a catalyst. It did not close the room.

Cohesion and farm spending, the largest block, took the lightest trim in Dublin’s design, while competitiveness, defence-related programmes and external action took more. That mix pleased almost no one in full. Friends of Cohesion still want a higher ceiling. Germany, the Netherlands, Austria and other net contributors still want a deeper cut. Piotr Serafin, the budget commissioner, said the Commission was dissatisfied with the proposed cuts. The European Parliament has already signalled it will not bless a smaller package.

Leaders discussed the box and then, in the published conclusions, invited Costa to take the talks forward in time. An agreement before the end of 2026, they wrote, would let the laws pass in 2027 so money still reaches farms, regions and programmes in January 2028. Costa said he would now speed work on new own resources with the Commission and the member states. National contributions, EU-wide taxes and the flexibility tools Dublin squeezed are the three levers left on his desk.

What the €90 Billion Ukraine Loan Already Covers

The 2026 half of the loan is identified. The 2027 half is not enough, on Kyiv’s figures. Leaders agreed the €90 billion instrument on 18 December 2025, after they failed to turn immobilised Russian central bank assets, about €210 billion, into the vehicle itself. Czechia, Hungary and Slovakia stayed out of the budget guarantee. The other 25 went ahead under enhanced cooperation. Ukraine is to repay only after it receives reparations; until then the Russian assets stay frozen and the Union reserves the right to use them to repay the loan, within EU and international law.

THE TWO-YEAR BRIDGE, AND THE 2027 SHORTFALL

• The loan: €90 billion for 2026 and 2027, backed by EU borrowing and the budget headroom of 25 member states.
• This year: up to €45 billion of assistance through 2026, covering needs named in Ukraine’s financing strategy.
• Next year: another €45 billion already scheduled, against Zelenskyy’s €155 billion war-cost figure and his ask for at least €70 billion more from the EU.
• The unused stock: about €210 billion in immobilised Russian state assets, still politically blocked as a direct funding tool.

Joint new debt is a hard sell while borrowing costs are high. Tapping the frozen assets remains divisive inside the EU and with Washington, which has floated its own ideas for the money. Bilateral top-ups would fall on a short list of richer capitals. Costa’s instruction to the Commission is to produce a 2027 proposal. He did not say from which pot.

After Hybrids, Chemicals Are Next for Quotas

The one file leaders could push was China, discussed in the conclusions as “global macroeconomic imbalances.” Over lunch on 15 October they told the Commission to build a larger trade-defence toolbox, including safeguards with quotas and tariffs, and to do it without waiting for another round of talks. Chemicals and machinery were named after cars.

Alicia García-Herrero at Bruegel puts the 2025 €360 billion goods deficit with China against Chinese automotive exports of about €15 billion. That is why a hybrid deal, even a real one, does not rebalance the books. On 8 and 9 October, Trade Commissioner Maroš Šefčovič left Beijing with a shared understanding to moderate Chinese exports of hybrids and plug-in hybrids. He said the arrangement opened the prospect of cutting those exports by more than half against a no-deal path. Officials have described an annual quota of 350,000 vehicles, rising 6% a year for four years, against a 2026 projection of about 800,000.

Friedrich Merz, the German chancellor, and Emmanuel Macron, the French president, had written to Ursula von der Leyen days earlier to demand a new instrument that can restrict or shut market access when a partner distorts the single market. Merz put the political line on the record in Brussels.

WHAT THE NEW TOOLBOX IS MEANT TO HOLD

• Safeguards: quotas and tariffs, first sketched for chemicals and machinery, to be used unilaterally and, leaders said, without delay.
• A faster instrument: the Merz-Macron request for a tool that can answer market shocks the way existing defences cannot.
• Diversification: a lever to push EU firms toward other suppliers of strategic goods, including critical raw materials.
• Solidarity: a mechanism to help a member state hit by Chinese counter-measures.

Von der Leyen told leaders the Commission would start work. Whether a finished tool exists before the year ends is still open. Beijing has already called the idea protectionist. The hybrid understanding buys time and covers a thin slice of the deficit. The summit’s trade language is a bet that unilateral tools will be ready when the next sector, not the next communiqué, is on the table.

Energy Prices Split the Room Over Carbon Rules

Thursday’s energy debate ran long because the Visegrád group and Italy wanted the conclusions to tell the Commission to curb short-term swings in electricity prices and to look again at the emissions trading system. Greece leaned the same way. Finland, Denmark and Sweden pushed back. They treat the carbon market as the device that makes firms pay for emissions and funds the shift away from volatile fuels.

WHERE LEADERS DISAGREE ON THE CARBON MARKET

• Andrej Babiš, Czech prime minister: He attacked the carbon tax as wrecking European competitiveness and driving power costs for the benefit of speculators.
• Finland, Denmark and Sweden: They resisted reopening ETS rules, arguing the system must keep a market price for carbon if investment in cleaner plant is to hold.
• The published line: Leaders asked for a coordinated short-term response, an update of the ETS2 impact assessment, faster work on the Market Stability Reserve, a pause in some Methane Regulation duties, a longer state-aid window for exposed industry, and a carbon market that is “well-functioning, transparent and predictable.”

Rome and the V4 do not have the votes to reopen the carbon market. The drafting fight was, in part, a message home about power bills. An official at the margins said leaders had spent a day on technical language that produced no new measure that actually cuts prices. The conclusions still say the energy transition remains the way to lower those prices over time, by speeding electrification and home-grown supply. That is a direction, not a rebate.

Italy and Spain Pause a Border Fight

Migration arrived on Friday with a short truce and a longer argument. Italy extended temporary border checks by a week so they lapse with Spain’s, on 22 October, after a run of tit-for-tat controls that followed the Ceuta crisis. Interior ministers are supposed to agree replacement measures by that date. Giorgia Meloni opened the summit in a softer register toward Pedro Sánchez than in June, when the same table turned into a shouting match with Mette Frederiksen of Denmark as well.

Frederiksen did not. She said she had asked the Commission to look at what happens when a country does almost the opposite of the rest, a line aimed at Sánchez’s plan to regularise the status of 600,000 migrants. Meloni, Frederiksen and Dutch Prime Minister Rob Jetten hosted an informal breakfast with 17 other leaders on “innovative solutions,” including emergency powers to suspend asylum claims in a crisis. Italy, Denmark and Poland tried to write a warning against “incentives for illegal migration” into the conclusions. The final text instead asks the Commission to work with capitals on an emergency framework and on “all types of instrumentalisation.”

That is the same pattern as the budget and the 2027 Ukraine bill. Leaders can line up for a photograph with Zelenskyy, order a bigger China toolbox, and still leave the expensive choices for the meeting Costa has called on 26 November. Spain votes three days later. The €70 billion question, and the €1.62 trillion one, will be on the table with them.