EU leaders early Friday announced a multi-billion dollar funding plan for Ukraine’s economy and military for the next two years – with the package funded for now by borrowing cash and not tapping into billions of dollars of frozen Russian assets held in the bloc.
Due in part to the United States cutting funding, Ukraine will have a funding gap of $160 billion (€137 billion) over the next two years, according to forecasts by the International Monetary Fund. The EU was seeking to meet two-thirds of that, or some about $105 billion (€90 billion).
“We have a deal,” EU Council President Antonio Costa wrote on X. “Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved. We committed, we delivered.”
Germany’s chancellor Friedrich Merz confirmed the deal, which was reached after discussions dragged late into Thursday night.
“This will address the urgent financial needs of Ukraine. Ukraine will only pay back this loan once Russia pays reparations,” Costa told journalists early Friday.
He added that the bloc’s executive arm had been given a mandate to explore how to make use of frozen Russian assets and the bloc reserved the right to use the frozen funds to repay its loan.
The bloc holds about €210 billion ($246 billion) of frozen Russian assets. Euroclear, a securities depository in Belgium, holds most of the Russian assets immobilized in the EU and the Belgian government has raised a number of concerns about using the prospect of using the assets. A key one is that Russia will view it as an illegal repurposing of its sovereign assets.
Belgian Prime Minister Bart De Wever had demanded “binding guarantees” from all EU member states in return for Belgium’s approval of the reparations loan.
Until now, the EU has been using the interest from the assets, which are mostly bonds, to finance some of its support for Kyiv. But as the bonds themselves mature, they are turned into cash, and this is the cash the EU has now agreed to borrow and lend to Ukraine until Russia pays reparations.
Negotiations went on “day and night” ahead of Thursday’s summit, a European diplomat told CNN.
