When the European Union agrees to borrow cash, the process involves both the European Council (EU leaders) and the European Parliament, but the Parliament's formal vote might occur later in the procedure.
The sequence of events is typically as follows:
- Political Agreement by the European Council: Major EU borrowing decisions, such as large recovery funds or significant loan packages to non-EU countries like Ukraine, require the unanimous political agreement of all EU leaders (Heads of State/Government) in the European Council. This initial agreement sets the political direction and mandate.
- Legislative Process: The European Commission then puts forward formal legislative proposals. These proposals are reviewed and amended by both the Council of the EU (member state ministers) and the European Parliament, which act as co-legislators.
- Parliamentary Vote (Consent/Approval): The European Parliament has to give its formal consent or final approval to the legal acts that enable the borrowing and define how the funds will be used. This is a crucial step in the process, not something that automatically happens before or at the exact moment the political agreement is announced.
- Final Adoption: Only after the Parliament and the Council of the EU formally agree on a joint text is the act adopted into law.
For example, regarding a recent loan package for Ukraine, EU leaders reached a political deal in December 2025, but the European Parliament was expected to vote on the final legislative approval in January 2026.
Therefore, when you hear the "EU agree[s] to borrow cash", it usually means the leaders have reached a political consensus, but the Parliament still needs to cast its formal vote to grant final legislative approval before the borrowing can be executed.
