EU Approves €90 Billion Loan for Ukraine Defense

Brussels, Belgium

The European Union has approved a €90 billion loan to support Ukraine’s defense and economic needs over the next two years, marking one of the bloc’s largest financial commitments in the ongoing conflict with Russia. The decision was finalized during an EU summit in Brussels, following intensive negotiations among member states.

The package will be funded through joint EU borrowing on international capital markets, backed by the union’s budget. Officials emphasized that the loan will be interest-free for Ukraine, with repayment contingent on Russia fulfilling obligations to compensate Ukraine for war-related damages. The funds are intended to help Kyiv maintain military operations, cover government expenses, and support critical infrastructure.

EU leaders stressed that the agreement demonstrates solidarity with Ukraine, reinforcing Europe’s commitment to upholding sovereignty and territorial integrity. European Council President António Costa described the loan as a “historic step” and a signal of unwavering support, highlighting the EU’s role in sustaining Ukraine’s resilience amid ongoing conflict.

Initial plans to use frozen Russian assets to finance the loan were abandoned due to legal concerns raised by several member states. Instead, the EU opted for the borrowing model to ensure a stable and legally sound funding mechanism while reserving the possibility of using seized assets for repayment in the future.

The agreement comes as Ukraine faces a projected financial shortfall of approximately €135 billion for 2026 and 2027, with the EU’s €90 billion contribution covering roughly two-thirds of that need. The remainder is expected from other international donors, including the IMF and NATO allies. Ukrainian President Volodymyr Zelenskyy welcomed the loan, emphasizing that it will strengthen both the country’s defense capabilities and economic stability.

While widely supported, the loan package required concessions to accommodate political sensitivities within the EU. Countries like Hungary, Slovakia, and the Czech Republic received assurances limiting their financial obligations under the program, helping secure consensus among member states.

The IMF also endorsed the agreement, noting that it addresses a critical financing gap and supports Ukraine’s debt sustainability. However, international observers caution that long-term success will depend on continued fiscal reforms and sustained international assistance.

Implementation of the loan is expected to begin in early 2026, with initial tranches reaching Kyiv in the first half of the year. EU officials highlighted that the funding will support both immediate defense needs and long-term economic recovery, reinforcing Ukraine’s integration with Western institutions.

This €90 billion loan underscores Europe’s strategic commitment to Ukraine and sends a clear message to Russia and the international community: the EU stands united in supporting Ukraine’s sovereignty, security, and future development.

Discover More UN Warns of Growing Humanitarian Crises in Yemen and Sudan