**BRUSSELS** – European Union leaders have collectively greenlit a substantial €90 billion financial package for Ukraine, designed to bolster the war-torn nation’s economic and military resilience through 2026 and 2027. The landmark agreement, forged during a summit in Brussels on Thursday, represents a significant commitment from the bloc, yet it deliberately bypasses the contentious issue of utilising frozen Russian state assets as a funding source.
The substantial loan, a critical injection of much-needed capital, is intended to alleviate Ukraine's pressing financial needs as its conflict with Russia grinds on. Ukrainian President Volodymyr Zelensky has repeatedly warned of dwindling resources, underscoring the urgency of such external assistance. The EU’s decision to proceed with the loan underscores a collective resolve among a significant majority of member states to prevent Ukraine's collapse, a sentiment echoed by EU foreign policy chief Kaja Kallas, who stated, "We just can’t afford to fail. We have to show that we are strong."
The €90 billion will be raised through joint borrowing undertaken by 24 of the 27 EU member states, with the European Union's central long-term budget providing a guarantee for the loans. This mechanism ensures that Ukraine will eventually be expected to repay the funds through future reparations levied against Russia for the damages inflicted by the war. While this approach offers a stable and predictable financial avenue, it sidesteps a more immediate and potentially larger source of funding that has proven divisive within the bloc.
Discussions surrounding the deployment of approximately €300 billion in frozen Russian central bank assets, impounded by Western nations following the full-scale invasion, have been fraught with legal and financial complexities. Several member states, including Belgium and Italy, have voiced considerable reservations regarding the potential legal ramifications and financial instability that could arise from such a move. These concerns have effectively stalled any immediate consensus on leveraging these frozen funds for Ukraine's benefit, pushing the debate into the future.
The agreement’s approval signifies a pragmatic approach by EU leaders, prioritising immediate support for Ukraine over protracted debates on the utilisation of frozen assets. President of the European Council Charles Michel hailed the outcome, declaring, "We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved. We committed, we delivered." This financial lifeline is projected to cover a substantial portion of Ukraine's estimated fiscal deficit, which stands at approximately €45-50 billion for the upcoming year, providing a crucial buffer for its ongoing defence and reconstruction efforts.
The decision, while a significant victory for Ukraine and a testament to the solidarity of most EU members, also highlights the persistent internal divisions on how best to financially support Kyiv. The exclusion of frozen Russian assets from this immediate funding plan leaves a significant, albeit contentious, financial instrument on the table for future consideration, as the EU grapples with the long-term implications of supporting Ukraine and holding Russia accountable for its aggression. The loan is expected to be formally disbursed in stages, with the initial tranches anticipated in the coming months.