The EU is developing a €20B contingency plan to finance Ukraine in 2024.

An alternative scheme has emerged that involves member states providing guarantees to the EU budget, which would allow the European Commission to borrow up to €20B on the capital markets for Kyiv next year.

The FT’s sources say this funding model has “gained traction as the most practical way of providing support” in case Hungary refuses to lift its veto at the summit scheduled for February 1.

The new support option for Kyiv does not require guarantees from all 27 EU member states, provided that the main participants will be the countries with the highest credit ratings. This would allow the EU to bypass Hungary’s veto, as it would not require unanimous support.

Some countries, including Germany and the Netherlands, will need parliamentary approval for national guarantees. But this process is expected to be completed in time to provide aid to Ukraine by March.

In addition, Ukraine has another backup financing plan: the EU might provide €18B in cheap loans for several months and up to a year.