Lagarde confirms ECB cannot back national guarantees for EU borrowing
ECB President Christine Lagarde clarified in a letter to MEP Fabio De Masi that the central bank cannot provide liquidity for national guarantees related to EU borrowing for Ukraine. This stance is based on Article 123(1) TFEU, which prohibits monetary financing of public bodies.
No ECB backstop for national guarantees
In a letter dated 6 February 2026, ECB President Christine Lagarde responded to MEP Fabio De Masi regarding an alternative proposal for financing Ukraine.
The European Council had previously decided on 18 December 2025 to provide additional financing through EU borrowing, a solution aimed at upholding international legal order and mitigating financial stability risks.
De Masi's inquiry focused on a rejected alternative that involved a system of national guarantees.
His core question was whether the ECB could provide the necessary liquidity if national governments were unable to fulfill their guarantee commitments.
Lagarde's answer to this specific question was unequivocally negative, a position she had also clarified during a Monetary Dialogue with the European Parliament's Committee on Economic and Monetary Affairs on 3 December 2025.
Treaty prohibits fiscal commitments
The ECB's stance is rooted in Article 123(1) of the Treaty on the Functioning of the European Union (TFEU).
This provision explicitly prohibits overdraft facilities or any other credit facility from the ECB or national central banks to Union institutions, central governments, or other public authorities of Member States.
Lagarde emphasized that the ECB will support the Union's efforts strictly within its mandate, but it cannot assume or replace fiscal commitments that Member States must provide.
This ensures compliance with the TFEU and prevents monetary financing.