EU leaders agreed on 18 December 2025 to provide Ukraine with a €90 billion loan covering 2026 and 2027, framing it as a bridge to keep the Ukrainian state financially functional while the war continues and as longer-term support packages are negotiated. The European Council’s decision comes amid widening concerns in Brussels that Ukraine’s budget gap and defence spending needs could outpace existing commitments if the conflict drags deeper into 2026.
What “€90 billion” actually means in practice
The package is structured as EU-backed borrowing on capital markets, with the EU budget’s “headroom” and guarantees underpinning the loan. Leaders described the instrument as an interest-free loan and repeatedly linked repayment to the principle that Russia should ultimately pay for the damage caused by its invasion. Politically, it is designed to lock in multi-year predictability for Kyiv, rather than force recurring emergency summits every time the cash runway shortens.
Why frozen Russian assets were not used this time
The EU has around €210 billion in immobilised Russian sovereign assets inside the bloc, with a large share held through Belgium-based infrastructure. In recent weeks, the Commission explored a “reparations loan” concept that would rely more directly on cash balances linked to those immobilised assets, but leaders failed to reach agreement at this summit. Belgium, in particular, raised concerns about legal exposure, financial stability risks, and potential retaliation, and the plan was judged too complex to implement quickly enough for Ukraine’s 2026 funding timeline. The EU left the door open to revisiting asset-based options later, but for now opted for a model that avoided the most contentious legal terrain.
The political bargain that unlocked the deal
Several capitals that had signalled resistance did not ultimately block the package after assurances were made about who would carry the guarantees. Reporting from the summit indicates Hungary secured a key condition that the mechanism should not create a direct financial burden for Hungary, Slovakia, or the Czech Republic, helping leaders present unity while managing internal dissent. The outcome matters as much politically as financially. It demonstrates that, even with divisions over Russian assets, the EU can still mobilise large-scale support via collective borrowing.
How this fits with the EU’s wider Ukraine financing architecture
The €90 billion decision sits on top of existing EU channels already supporting Ukraine’s budget stability and reforms.
First, the Ukraine Facility, in force since 2024, is the EU’s central multi-year framework linking disbursements to reform and investment benchmarks under a Ukraine Plan, with periodic payments already made in 2025.
Second, the EU is also participating in the G7’s Extraordinary Revenue Acceleration approach, where windfall profits from immobilised Russian assets are used to help service and repay loans to Ukraine. Under this umbrella, the European Commission has been disbursing repeated €1 billion tranches in 2025 as part of an exceptional Macro-Financial Assistance loan. This is important context: the EU has been willing to use proceeds generated by frozen assets, but using the underlying assets themselves as collateral, or moving toward confiscation, remains a legal and political red line for some member states.
Sources: Reuters, Associated Press, The Guardian, Al Jazeera