EU leaders have agreed to provide a €90 billion loan to Ukraine, utilizing funds from the bloc’s shared budget after negotiations regarding the use of frozen Russian assets for reparations fell through. This financial agreement is crucial for Ukraine, which has indicated it may face a significant crisis by early 2026 without ongoing support. The decision came after extensive discussions lasting over 16 hours at a summit in Brussels.
EU Council President António Costa emphasized the commitment from member states, stating, “We committed, we delivered.” While the original proposal aimed to back the loan with €210 billion of Russian assets held primarily in Belgium, the initiative faced resistance. Belgian Prime Minister Bart De Wever expressed concerns about potential financial risks associated with this approach, prompting other leaders to dismiss the terms.
The approved €90 billion loan will be drawn from capital markets and is secured against unused funds within the EU’s budget. It is designed to support Ukraine’s financial needs over the next two years. The arrangement allows Ukraine to defer repayment until after potential reparations from Russia are received. Despite the agreement, it served as a setback for German Chancellor Friedrich Merz and European Commission President Ursula von der Leyen, who advocated for the reparations loans.
In a compromise, the loan plan alleviates any financial obligations for the Czech Republic, Hungary, and Slovakia, ensuring their non-participation in funding Ukraine directly while maintaining a political stance against Russia.
Why this story matters:
- The loan represents vital European support for Ukraine amid ongoing conflict.
Key takeaway:
- EU leaders have opted for a budget-backed loan, prioritizing immediate financial aid over the complex issue of using Russian assets.
Opposing viewpoint:
- Some EU leaders, particularly from Belgium, expressed concern over financial risks associated with utilizing Russian sovereign assets for reparations.
