EU Approves €90 Billion Loan for Ukraine Through 2027, Postponing Use of Frozen Russian Assets

Following sixteen grueling hours of deliberation at the European Summit in Brussels on Friday, December 19, 2025, European Union leaders reached a foundational agreement to provide substantial financial backing for Ukraine spanning the 2026 and 2027 period. The total allocation amounts to 90 billion euros, which will be secured through a loan guaranteed by the collective EU budget. European Council President António Costa confirmed that this action fulfills prior commitments made by the bloc. This lifeline funding is deemed absolutely crucial; projections indicated that without this infusion, Ukraine faced the risk of exhausting its financial reserves as early as the second quarter of 2026.

German Chancellor Friedrich Merz asserted that the designated sum is adequate to cover Kyiv's military and budgetary requirements for the forthcoming two years. He characterized the decision as a clear signal to the Russian Federation, suggesting that the continuation of the conflict is an exercise in futility. Significantly, the financing is structured as an interest-free credit, which Ukraine is only obliged to repay once Russia delivers official war reparations. Should Moscow fail to provide these reparations, the EU retains the prerogative to utilize frozen assets to settle the debt. Ukrainian President Volodymyr Zelensky expressed profound gratitude for the approved support, emphasizing that it truly bolsters their national resilience.

The most contentious element during the summit involved the deferred decision regarding the direct utilization of approximately 210 billion euros in frozen Russian assets. A substantial portion of these funds, specifically 180 billion euros, is currently held within the Belgian depository, Euroclear. Resistance to immediate deployment of these reserves primarily originated from Belgium, where Prime Minister Bart De Wever insisted on receiving unlimited financial guarantees from other EU member states to mitigate potential retaliatory measures or legal challenges initiated by the Russian Federation. European Commission President Ursula von der Leyen had previously stipulated that unlocking these assets would require a qualified majority vote among EU nations, effectively preventing a single member state from unilaterally halting the extension of the asset freeze.

The response emanating from Moscow was predictably severe. President Vladimir Putin labeled the initial proposal for asset utilization as outright “looting” and warned of severe repercussions for the perceived trustworthiness of the Eurozone. Reports indicate that the Central Bank of Russia has already initiated legal action against Euroclear, seeking damages equivalent to 229 billion US dollars for the retention of sovereign assets. Furthermore, Hungarian Prime Minister Viktor Orbán voiced his opposition to the concept of using these assets, although his nation, alongside Slovakia and the Czech Republic, will ultimately abstain from participating in the direct EU borrowing mechanism.

Prior to the summit, EU High Representative for Foreign Affairs Josep Borrell had estimated the chances of reaching a decision on asset utilization at a fifty-fifty proposition, underscoring the pivotal nature of Belgium's stance. In essence, the European Council adopted a pragmatic, albeit temporary, solution by securing Kyiv's short-term fiscal stability through the EU's common debt mechanism. However, the more complex, long-term strategy for deploying the frozen Russian reserves remains unresolved. This financing, secured via capital market borrowing backed by the EU budget, serves as an interim measure, suggesting that the fate of the assets may be relegated to discussions occurring only after a potential peace agreement is reached.