BRUSSELS (AP) — European Union leaders agreed Friday to provide Ukraine with a huge, interest-free loan to cover its military and economic needs over the next two years, but they failed to bridge differences with Belgium, which could have used frozen Russian assets to raise funds.
After nearly four years of war, the International Monetary Fund estimates Ukraine will need 137 billion euros ($161 billion) in 2026 and 2027. The government in Kyiv is on the verge of bankruptcy and will desperately need the money by spring.
The plan was to use some of the 210 billion euros ($246 billion) worth of Russian assets frozen in Europe, mostly in Belgium.
Leaders worked until Thursday night to reassure Belgium that they would protect Belgium from Russian retaliation if it backed a “reparations loan” scheme, but ultimately opted to borrow money on capital markets as negotiations faltered.
“We have an agreement. The decision to provide 90 billion euros ($106 billion) in support to Ukraine in 2026-27 has been approved. We promised and we delivered,” EU Council President Antonio Costa said in a social media post.
Not all countries agreed to the loan package. Hungary, Slovakia and the Czech Republic refused to support Ukraine and voiced their opposition, but eventually reached an agreement in which they did not block the plan and pledged to protect it from any financial repercussions.
Hungarian Prime Minister Viktor Orban, Russian President Vladimir Putin’s closest ally in Europe and a self-proclaimed peacemaker, said “I don’t like the EU getting into a war”.
“Money means war,” Orban said. He also described rejected plans to use frozen Russian assets as a “dead end”.
French President Emmanuel Macron said the deal was a major development and called borrowing on capital markets “the most realistic and practical way to finance Ukraine and its war.”
German Chancellor Friedrich Merz also welcomed the decision.
Mertz said in a statement that “the fiscal package for Ukraine has been finalized,” noting that “Ukraine received a zero-interest loan.”
“These funds are sufficient to meet Ukraine’s military and budgetary needs for the next two years,” Merz added. He said the frozen assets would remain frozen until Russia pays war reparations to Ukraine. Ukrainian President Volodymyr Zelensky said it would cost more than 600 billion euros ($700 billion).
“If Russia does not pay compensation, we will use Russian fixed assets to repay the loan in full compliance with international law,” Mertz said.
Zelensky, who traveled to Brussels for a summit amid fierce protests by farmers angry over proposed trade deals with five South American countries, called for a quick decision to ensure Ukraine’s continued survival in the new year.
Polish Prime Minister Donald Tusk warned earlier on Thursday that “either give money today or blood tomorrow” to help Ukraine.
Plans to use frozen Russian assets have run into trouble as Belgian Prime Minister Bart De Wever rejected the plan as a legal risk and warned it could harm Euroclear’s business. Euroclear is a Brussels-based financial clearing house that holds 193 billion euros ($226 billion) in frozen assets.
On Friday, Russia’s central bank filed a lawsuit against Euroclear, blocking its funds from providing any loans to Ukraine, which upset Belgium. After Ukraine launched an all-out war in 2022, the EU imposed sanctions on Moscow and Ukrainian funds were frozen.
“For me, compensation loans are not a good idea,” De Wever told reporters after the meeting. “When we interpret the text again, there are a lot of questions, I said, I told you, I told you. There are a lot of unanswered questions. If you start pulling on the unanswered questions on the string, things are going to fall apart.”
“We avoided setting precedents that could undermine legal certainty around the world. We upheld the European principle of respect for the law, even when it was difficult, even when we were under pressure,” he said, adding that the EU “sent a strong political signal. Europe supports Ukraine”.
Nonetheless, Costa said the EU “reserves the right to use fixed assets to repay this loan”.
