EU Agrees to €90 Billion Loan for Ukraine Amid Disagreements Over Russian Assets

European Union leaders have agreed to provide Ukraine with a €90 billion loan over the next two years, opting to raise funds through joint debt issuance after failing to reach consensus on using frozen Russian assets. The decision was made during a summit in Brussels, where leaders faced challenges in securing unanimous support for tapping into approximately €210 billion in immobilised Russian assets, primarily held in Belgium.

Belgium, which holds the majority of these assets, expressed concerns about potential legal repercussions and demanded unlimited guarantees to shield against possible Russian retaliation. This impasse led the EU to pursue joint debt issuance as an alternative means to support Ukraine.

Hungary, the Czech Republic, and Slovakia have chosen not to participate in the joint debt scheme. Hungarian Prime Minister Viktor Orbán, who has been critical of financial support for Ukraine, allowed the plan to proceed in exchange for Hungary's non-participation.

The loan is intended to be interest-free, with Ukraine expected to repay it using potential future reparations from Russia. However, it remains uncertain whether Russia will ever agree to pay such reparations, raising the possibility that the loan could effectively become a grant.

European Commission President Ursula von der Leyen emphasized the importance of the agreement, stating that the primary goal of funding Ukraine has been achieved.

Despite the agreement on the loan, the EU continues to explore the possibility of using frozen Russian assets to support Ukraine, though legal and political challenges persist.