EU leaders agree on 90 billion euro loan to Ukraine after a plan to use Russian assets unravels
BRUSSELS (AP) — European Union leaders agreed Friday to provide Ukraine with a large interest-free loan to meet its military and economic needs for the next two years, but failed to narrow differences with Belgium. use frozen Russian assets to raise funds.
After nearly four years of war, the International Monetary Fund estimates Ukraine will need 137 billion euros ($161 billion) in 2026 and 2027. The government in Kiev is on the verge of bankruptcy and urgently needs this money until spring.
The plan was to use some of the 210 billion euros ($246 billion) worth of Russian assets frozen in Europe, mostly in Belgium.
Leaders worked throughout Thursday night to reassure Belgium that they would protect it from any retaliation from Russia if it backed the “reparations loan” plan, but in the end the leaders did not exercise that option, but when talks reached an impasse the leaders eventually opted to borrow the money from capital markets.
“We have an agreement. The decision to provide 90 billion euros ($106 billion) of support to Ukraine for the 2026-27 period has been approved. We committed, we fulfilled,” EU Council President António Costa said in a post on social media.
Not all countries accepted the loan package. Hungary, Slovakia and the Czech Republic refused and opposed supporting Ukraine, but an agreement was reached in which they did not block the package and were promised protection against any financial repercussions.
Russian President Vladimir Putin and Hungarian Prime Minister Viktor Orbán closest ally in Europe and describes himself as a peacemaker, said “I would not like a European Union in war.”
“Giving money means war.” said Orbán. He also stated that the rejected plan to use frozen Russian assets was a “dead end”.
French President Emmanuel Macron said the deal was a major advance, saying borrowing from capital markets was the “most realistic and practical way” to finance Ukraine and the war effort.
German Chancellor Friedrich Merz also welcomed the decision.
In his statement, Merz said, “The financial package for Ukraine has been completed” and added, “A zero-interest loan was given to Ukraine.”
“These funds are sufficient to cover Ukraine’s military and budget needs for the next two years,” Merz said. He said the frozen assets will remain blocked until Russia pays war reparations to Ukraine. Ukrainian President Volodymyr Zelenskyy said it would cost over 600 billion euros ($700 billion).
“If Russia does not pay compensation, we will use Russia’s dormant assets to repay the loan, in full compliance with international law,” Merz said.
Zelenskyy went to Brussels for the summit. passionate protests Farmers, angry about the proposed trade agreement with five South American countries, had called for a quick decision to keep Ukraine afloat in the new year.
Polish Prime Minister Donald Tusk warned early Thursday that “either money today or blood tomorrow” must be sent to help Ukraine.
The plan to use frozen Russian assets has hit an impasse after Belgian Prime Minister Bart De Wever rejected the plan as legally risky and warned it could harm the business of Euroclear, the Brussels-based financial clearing house where 193 billion euros ($226 billion) of frozen assets are held.
Belgium was shaken last Friday when the Russian Central Bank launched a new policy. Case against Euroclear To prevent any loans from being given to Ukraine with the money frozen within the scope of EU sanctions imposed on Moscow, which started an all-out war in 2022.
“For me, the compensation loan was not a good idea,” De Wever told reporters after the meeting. “When we reexplained the text, there were so many questions. I said, I told you, I told you. There are a lot of loose ends. And if you start pulling the loose ends on the strings, the work will collapse.”
“We avoided setting a precedent that risked weakening legal certainty around the world. We preserved the principle that Europe should respect the law even in difficult situations and when we are under pressure.”
Still, Costa said the EU “reserves the right to draw on dormant assets to repay this loan.”
