Ukraine deal: EU leaders agree €90bn loan, but without use of frozen Russian assets | Russia
European Union leaders have agreed to provide Ukraine with a large interest-free loan to meet its military and economic needs for the next two years after failing to reach an agreement on using frozen Russian assets, diplomats said early Friday.
EU Council President Antonio Costa said, “We have an agreement. The decision to provide support to Ukraine in the amount of 90 billion Euros (106 billion USD) for the 2026-27 period has been approved. We committed, we fulfilled.” in question in a post on social media.
With public finances across the EU already strained by high debt levels, the European Commission had proposed using frozen Russian central bank assets to provide a large loan to Kiev, and jointly borrowing from the EU budget as a second option.
Belgian prime minister Bart De Wever said EU leaders had prevented “chaos and division” with their decision to provide loans to Ukraine by borrowing cash rather than using frozen assets. “We remained united,” De Wever said after the midnight talks.
German Chancellor Friedrich Merz said that Ukraine would have to repay the loan only if Russia paid war reparations, and that if Russia did not pay reparations, the EU reserved the right to use Russian assets immobilized in the EU for repayment.
Merz pushed hard to have the asset plan frozen, but still said the final decision on the loan “sends a clear signal” to Russian President Vladimir Putin.
The EU estimates that Ukraine needs an extra 135 billion euros ($159 billion) to stay afloat over the next two years.
Ukrainian President Volodymyr Zelenskyy told EU leaders at the beginning of the summit on Thursday that using Russian assets was the right way to do it. “Russian assets should be used to defend against Russian aggression and rebuild what was destroyed by Russian attacks. This is moral. It is fair. It is legal,” Zelensky said.
The draft text of the summit results, seen by Reuters, stated that the financing would be provided by borrowing from capital markets in return for the EU budget.
The text stated that the agreement would not affect the financial obligations of Hungary, Slovakia and the Czech Republic, which do not want to contribute to Ukraine’s financing.
Moscow-friendly Hungary had previously announced that it would oppose the agreement, just as it opposed the use of Russian assets.
In the final draft text of the summit, it was stated that EU governments and the European parliament will continue to work on creating a loan to Ukraine based on frozen Russian central bank assets.
The decision on the financing deal for Ukraine was made by Polish prime minister Donald Tusk as a choice between “money today or blood tomorrow” at a time when Belgium opposed a loan secured against Russia’s frozen assets.
“It’s good in the sense that Ukraine gets funding for two years,” an EU diplomat told Reuters.
The move came after hours of discussions between leaders over the technical details of a loan based on frozen Russian assets that proved too complex or politically challenging to resolve at this stage, diplomats said.
“We have moved from saving Ukraine to at least saving the reputation of those pushing for the use of frozen assets,” a second EU diplomat said.
The main challenge in the use of Russian money was to provide adequate guarantees to Belgium, where €185 billion of the total €210 billion of Russian assets in Europe were held, against the financial and legal risks arising from possible Russian retaliation for the release of the money to Ukraine.
Russia’s central bank announced on Thursday that it would file a lawsuit for damages against European banks “for the illegal blocking and use of their assets”, following a $230 billion compensation claim from Euroclear. Security officials told the Guardian that Euroclear, the Brussels warehouse where €185bn of Russian assets are parked, had been subjected to an intimidation campaign.
With Reuters, Associated Press and France-Presse Agency
