The European Union has agreed to provide Ukraine with a €90 billion loan to address looming budget shortfalls, while shelving plans to use frozen Russian assets to finance the support package.
The decision was reached during late-night summit talks in Brussels on Friday, offering Kyiv critical financial relief as diplomatic efforts intensify to bring an end to Russia’s nearly four-year war with Ukraine.
European Council President Antonio Costa, who chaired the meeting, said the agreement would strengthen Ukraine’s ability to defend itself and support its citizens. “Today’s decision will provide Ukraine with the necessary means to defend itself and to support the Ukrainian people,” he said.
Reacting to the development, Ukrainian President Volodymyr Zelensky described the loan as a significant boost to his country’s resilience. He welcomed the fact that Russian assets remain frozen, noting that Ukraine has now secured financial guarantees for the coming years.
Under the arrangement, the loan will be backed by the EU’s common budget and cover Ukraine’s financing needs over the next two years. EU leaders had initially considered using approximately €200 billion in Russian central bank assets frozen within the bloc to fund the loan. However, the proposal was dropped after Belgium—where most of the assets are held—raised concerns over liability-sharing, which other member states were unwilling to accommodate.
Belgian Prime Minister Bart De Wever said the alternative plan reduced major financial and legal risks, describing the abandoned asset proposal as overly complex and potentially dangerous.
German Chancellor Friedrich Merz, a strong proponent of using frozen Russian assets, nonetheless said the loan agreement still sends a strong political signal to Moscow. European Commission President Ursula von der Leyen added that Ukraine would only be expected to repay the loan once Russia compensates for the destruction caused by the war.
To secure unanimous approval among the EU’s 27 member states, countries including Hungary, Slovakia, and the Czech Republic were granted exemptions from direct participation in the joint debt arrangement.
The EU estimates Ukraine will require an additional €135 billion over the next two years to remain financially stable, with funding pressures expected to intensify from April.
While Ukraine had strongly advocated for the use of Russian assets—describing it as moral, fair, and lawful—securing the loan through alternative means was seen as a necessary compromise. Ukrainian officials indicated that financial certainty could strengthen Kyiv’s position in any future peace negotiations.
The development comes amid parallel diplomatic efforts by the United States to broker an end to the conflict. Although Europe has played a limited role in those talks so far, French President Emmanuel Macron said it may be time for European leaders to re-engage directly with Moscow.
President Zelensky also confirmed that Ukrainian and US delegations are scheduled to hold further talks in Washington, as Kyiv seeks clearer security guarantees to deter future aggression.
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