EU Leaders Approve €90 Billion Loan to Ukraine Amidst Frozen Russian Assets Dispute

European Union leaders have agreed to provide Ukraine with a €90 billion loan to support its financial needs for 2026 and 2027. The decision was made after extensive discussions at a summit in Brussels, where leaders opted to borrow against the EU's shared budget rather than utilizing frozen Russian assets.

European Council President António Costa announced the agreement, stating, "We have a deal. Decision to provide €90bn of support to Ukraine for 2026-27 approved. We committed, we delivered."

The initial proposal to use approximately €210 billion in frozen Russian sovereign assets, primarily held in Belgium, faced legal and financial challenges. Belgium expressed concerns over potential liabilities and demanded extensive guarantees, leading to the rejection of this approach.

German Chancellor Friedrich Merz, who had advocated for using the frozen assets, acknowledged the outcome, describing it as "a very practical, good solution that in its impact is just like the solution that we had long discussed, but was clearly just too complicated."

The loan will be raised from capital markets and secured against untapped spending in the EU's shared budget. Ukraine will only be required to repay the loan after Russia has paid reparations. If Moscow does not pay, the immobilized Russian assets could be used to repay the loan.

This financial support comes as Ukraine faces significant economic challenges due to the ongoing conflict with Russia. The International Monetary Fund estimates that Ukraine requires €135 billion to cover its budgets for 2026 and 2027.

The agreement underscores the EU's commitment to supporting Ukraine amid the ongoing conflict, despite internal disagreements over the use of frozen Russian assets.