European Union leaders have pledged a €90 billion loan to Ukraine after a marathon summit in Brussels, providing a critical financial lifeline for the war-torn country but stopping short of using frozen Russian assets to secure the funds. The deal, announced in the early hours of Friday, is designed to cover most of Ukraine’s military and economic needs for the next two years, addressing an imminent cash crunch that threatened to undermine its defense efforts.
The agreement was reached after more than a day of intense negotiations among the 27 member states, with European Council President António Costa declaring, “We committed, we delivered.” The loan will be backed by the EU’s common budget, meaning Ukraine will only need to repay it once Russia pays reparations for the war, and the union reserves the right to use immobilized Russian assets for repayment if necessary. This approach avoided the more contentious plan to directly leverage the €210 billion in Russian funds frozen in the EU, which had been advocated by countries like Germany.
Key opposition came from Belgium, where the majority of the frozen assets are held, due to concerns over unlimited liability guarantees from other member states if Russia successfully sued for damages. Belgian Prime Minister Bart De Wever noted that the reparations loan idea had “loose ends” that could unravel, highlighting legal risks as Euroclear, the Brussels-based clearing house, faces a $230 billion lawsuit from the Russian central bank. This legal battle, coupled with intimidation campaigns by Russian intelligence, made the asset plan untenable for some leaders.
Ukrainian President Volodymyr Zelenskyy welcomed the deal, calling it “significant support that truly strengthens our resilience,” while urging that Russian assets remain immobilized. He had earlier warned that without funding by spring, Ukraine would have to reduce drone production, a vital component of its defense. The EU estimates Ukraine needs an additional €135 billion over two years, with the cash shortage set to begin in April, making this loan a timely intervention.
German Chancellor Friedrich Merz, a proponent of using Russian assets, framed the agreement as “a decisive message” to Russian President Vladimir Putin, emphasizing that the war will not pay off. Meanwhile, French President Emmanuel Macron suggested re-engaging with Putin in the coming weeks, indicating ongoing diplomatic efforts. The decision also involved concessions to central European nations like Hungary, Slovakia, and the Czech Republic, which secured exemptions from contributing to loan guarantees, as highlighted by Hungarian Prime Minister Viktor Orbán’s tweet “back in business!”
The funding comes amid heightened diplomacy, with US and Russian officials scheduled to meet in Miami for peace talks, and Zelenskyy announcing new discussions with Washington on security guarantees. The EU has called on non-EU allies to provide about €45 billion to cover the remaining needs, underscoring the global stakes. Poland’s Prime Minister Donald Tusk had framed the choice as “money today or blood tomorrow,” stressing the urgency of support.
This loan represents a compromise that maintains EU unity but leaves open questions about the long-term use of Russian assets. While it provides immediate relief for Ukraine, the failure to agree on asset seizure may slow broader efforts to hold Russia financially accountable. The deal underscores the bloc’s commitment to Ukraine’s survival, even as divisions persist over the best methods to fund the war effort. The Kremlin’s top economic negotiator, Kirill Dmitriev, welcomed the outcome, stating that “for the time being, the law and common sense have won a victory,” reflecting the ongoing geopolitical tensions.
