EU Agrees €90bn Loan for Ukraine Amid Ongoing War
The European Union has approved a €90 billion loan package to support Ukraine over the next two years, reinforcing its long term commitment as the conflict with Russia continues.
The deal aims to cover most of Ukraine’s urgent military and civilian financing needs through 2026 and 2027.
Faster Funding Through EU Budget Support
Unlike earlier proposals, the loan will be raised on international capital markets and backed by the EU budget.
This approach allows funds to reach Kyiv more quickly, with EU officials expecting disbursement from mid January. Ukraine will only be required to repay the loan if and when Russia pays war reparations.
Frozen Russian Assets: A Divisive Issue
A central debate at the summit was whether the loan should be secured directly against Russia’s €210 billion in frozen assets held in the EU.
Belgium, which hosts the majority of these funds through Euroclear, raised concerns over legal risks and potential compensation claims from Moscow. As a result, EU leaders failed to reach consensus on immediate use of the assets.
Compromise on Reparations and Asset Use
As a compromise, the EU agreed to keep Russian assets frozen indefinitely and reserved the right to use them in the future to repay the loan if Russia refuses to pay reparations.
European Council President António Costa said the EU had “committed and delivered,” while German Chancellor Friedrich Merz argued that the decision still ensured Russia’s war would not “pay off.”
Ukraine Welcomes Long-Term Financial Security
Ukrainian President Volodymyr Zelenskyy described the agreement as a significant boost to Ukraine’s resilience and a vital financial security guarantee for the coming years.
The deal also marked rare unity, as Hungary, Slovakia and the Czech Republic agreed to the plan without being liable for loan guarantees.
Call for Support from Non-EU Allies
Despite the €90bn agreement, the EU acknowledged that Ukraine’s total funding needs remain far higher.
Brussels is now calling on non-EU partners such as the UK, Canada and Japan to help close the remaining gap in Ukraine’s estimated €136 billion financing requirement for 2026–27.
A Signal of Unity, With Limits
The loan deal sends a strong political message of EU unity and support for Ukraine. However, the unresolved question of fully using frozen Russian assets highlights the legal and financial constraints the bloc continues to face as the war enters another critical phase.
