News|Russia-Ukraine warEU agrees hefty $105bn Ukraine loan without using Russian assetsEU leaders decide to borrow cash to fund Ukraine’s defence rather than use frozen Russian monies, diplomats said.
The European Union has agreed to provide an interest-free loan to Ukraine to support its military and economic needs in its ongoing conflict with Russia over the next two years. This decision was announced by EU Council President Antonio Costa.
The European Union has agreed to provide an interest-free loan to Ukraine to support its military and economic needs in its ongoing conflict with Russia over the next two years. This decision was announced by EU Council President Antonio Costa.
The decision, reached early on Friday, involves borrowing money from capital markets to fund Ukraine's defense, rather than utilizing frozen Russian assets, according to diplomatic sources.
Ukrainian President Volodymyr Zelenskyy expressed gratitude for the EU's financial support, highlighting its significance in bolstering Kyiv's defense capabilities. The agreement includes a commitment to provide €90 billion ($105.5 billion) of support to Ukraine for 2026-2027.
The funding will be sourced from capital markets, secured against the EU budget, bypassing the previously considered plan to use frozen Russian assets.
The agreement includes a commitment to provide €90 billion ($105.5 billion) of support to Ukraine for 2026-2027.
The decision does not impose financial obligations on Hungary, Slovakia, and the Czech Republic, as these countries opted not to contribute to Ukraine's financing. Discussions regarding a loan based on Russian central bank assets will continue between EU governments and the European Parliament.
Russian envoy Kirill Dmitriev commented on the EU's decision to borrow funds rather than use Russia's frozen assets, describing it as a triumph of "law and sanity."
Ukraine will only repay the EU loan upon receiving war reparations from Russia. Until then, the Russian assets will remain frozen, with the EU retaining the right to utilize them to repay the loan.
The complexity of using frozen Russian assets due to legal and political challenges was cited as a reason for not proceeding with that option. The main challenge involved ensuring sufficient guarantees for Belgium, where the majority of the frozen assets are located, against potential Russian retaliation.
Some EU countries, such as Germany and the Netherlands, expressed willingness to support the loan, while others, including Italy and Bulgaria, were more cautious. Belgium's Prime Minister Bart De Wever welcomed the move to capital market borrowing, noting it helped avoid "chaos and division."
Based on reporting by Al Jazeera.