The EU has decided to move forward with plans for a drone wall as a key part of its eastern defences. Meanwhile, support is increasing for a €140 billion loan to Ukraine based on Russian money that has been frozen in Europe.

After a meeting with ministers from 10 mostly central and eastern European member states plus Ukraine, the EU’s defence commissioner, Andrius Kubilius, explained the plans. He said a drone wall to protect against attacks from the skies was an immediate priority and a core element of the bloc’s eastern border defences.

The issue has become more urgent after a series of drone incursions in Denmark, Poland and Romania. There have also been violations of Estonian airspace by Russian fighter jets, while Russia continues its deadly bombardment of Ukraine.

Kubilius said it was urgent to have an effective detection system. This would include radars and acoustic sensors, as well as capabilities to intercept and destroy drones.

The commissioner acknowledged that there was a potential problem with the cost of drone defence. He explained: “If you are using air missiles from your air fighter to shoot the drone, then you are using a missile which costs €1 million to kill the drone which costs €10,000.”

Meanwhile, the Kremlin criticised the suggestion of shooting down Russian military planes over Europe as “reckless” and “irresponsible”. This came after Donald Trump suggested that alliance members should do so.

While defence talks were ongoing, a leaked proposal revealed growing momentum behind plans for a €140 billion loan to Ukraine. The loan would be based on Russia’s frozen assets in Europe.

The European Commission believes it can generate a €140 billion interest-free EU loan for Ukraine based on Russia’s immobilised central bank assets. Importantly, this would be done without confiscating the funds, according to a leaked document seen by the Guardian.

Currently, the EU already takes the profits from Russian assets frozen in the EU to generate funds for Ukraine. However, the original capital remains untouched. Germany, France and Belgium have resisted plans from central and eastern European countries to seize the assets. These assets are largely held at the Brussels-based financial institution Euroclear.

EU officials now believe they have found a legally safe way to loan Ukraine money based on the assets. The plan is based on the assumption that Russia will ultimately pay Kyiv reparations for the enormous damage caused during more than 1,300 days of full-scale war.

In a significant move, the German chancellor, Friedrich Merz, has swung behind such an idea. He announced his support via an opinion article in the Financial Times for a legally secure financial instrument. This would secure Ukraine’s military resilience for several years.

Merz said that ideally the plans would be backed unanimously by the EU’s 27 member states. However, he suggested they could be approved by a majority. This was an indirect acknowledgment that the EU needed to consider ways to avoid a veto from Hungary’s Kremlin-friendly government.

The EU’s sanctions against Russia must be renewed every six months. This gives Budapest significant leverage, although Hungary has never blocked sanctions before.

EU officials also believe they have found a legal solution to avoid the unanimity requirement. This means the cost of the loan would ultimately be paid by Russia rather than member states, which would act as guarantors.

EU leaders are expected to discuss the drone wall and reparations loan at a Copenhagen summit next week. They aim to reach agreements by the end of October.