Meeting in Brussels, European Union leaders reached a landmark agreement to support Ukraine with a €90 billion interest-free loan, aiming to stabilize the country’s finances as the war enters its fourth year. The deal follows intense negotiations and comes amid growing concerns over Ukraine’s ability to meet both military and budgetary needs.

Ukraine’s Urgent Funding Needs

According to the International Monetary Fund, Ukraine will require an estimated €137 billion in 2026 and 2027. Kyiv is widely seen as being on the brink of bankruptcy, with officials warning that new funding must be secured by spring to keep the government functioning.

EU leaders initially explored the option of using frozen Russian assets in Europe—worth around €210 billion—as a basis for financing the aid. Most of these assets are held in Belgium at the Brussels-based financial clearing house Euroclear.

Why the Russian Assets Plan Fell Apart

Efforts to persuade Belgium to back the so-called “reparations loan” continued late into Thursday night. However, Belgian Prime Minister Bart De Wever rejected the proposal, warning that it posed serious legal risks and could undermine global financial confidence.

Belgium’s concerns were heightened after Russia’s central bank filed a lawsuit against Euroclear, seeking to block any use of its frozen assets to finance loans to Ukraine. De Wever said the plan contained “too many loose ends” and risked setting a dangerous legal precedent.

A Political and Financial Signal from the EU

EU Council President António Costa confirmed the agreement in a social media post, saying the decision to provide €90 billion in support for 2026–2027 had been approved. “We committed, we delivered,” he said.

French President Emmanuel Macron described borrowing from capital markets as “the most realistic and practical solution,” while German Chancellor Friedrich Merz said the financial package would be sufficient to cover Ukraine’s military and budgetary needs for the next two years.

Merz added that frozen Russian assets would remain immobilized until Russia pays war reparations to Ukraine. He noted that if reparations are not paid, the EU reserves the right—under international law—to use those assets to repay the loan. Ukrainian President Volodymyr Zelenskyy has previously estimated reparations could exceed €600 billion.

Dissenting Voices and Compromise

Hungary, Slovakia and the Czech Republic opposed the loan package, arguing against continued financial support for Ukraine. However, a compromise was reached under which the three countries agreed not to block the deal and were promised protection from any potential financial fallout.

Hungarian Prime Minister Viktor Orbán, a close ally of Russian President Vladimir Putin, said he did not want “a European Union at war,” arguing that financial support would only prolong the conflict. He also dismissed the idea of using frozen Russian assets as a “dead end.”

Summit Background

Zelenskyy traveled to Brussels to press for a swift decision, as protests by farmers against a proposed trade agreement with South American countries unfolded near the summit venue. Earlier, Polish Prime Minister Donald Tusk warned that Europe faced a stark choice between “sending money today or blood tomorrow” in its response to Ukraine.

While EU leaders failed to agree on using frozen Russian assets directly, the loan package nonetheless sent a strong political message of continued European support for Ukraine.