Under the special loan arrangement, Ukraine will receive €30 billion to support its budgetary needs and €60 billion for the purchase of weapons and ammunition.
European Union member states have reached an agreement to issue a €90 billion loan to meet Ukraine’s financial and military needs for 2026 and 2027, with Brussels aiming to make the first payment in early April in order to prevent a sudden shortfall in foreign assistance for Kyiv.
Agreement on the legal texts was reached by ambassadors on Wednesday afternoon, after Cyprus, the holder of the rotating Presidency of the Council, presented a revised version.
“Today’s agreement shows that the EU continues to act decisively in support of Ukraine and its people. The new funding will help ensure the country’s strong resilience in the face of Russian aggression,” said Makis Keravnos, Cyprus’s Minister of Finance.
“At the same time, we are sending a strong signal that the sovereignty and territorial integrity of states must be fully respected, in accordance with international law.”
The €90 billion loan, which was politically agreed at a summit in Brussels, will be financed through the issuance of joint debt, with the EU budget serving as a guarantee for investors.
As part of the agreement, Hungary, Slovakia, and the Czech Republic will be fully exempt from all financial obligations, including annual interest payments. All three countries had firmly opposed any additional aid to Kyiv.
The European Commission estimates that the remaining 24 member states will need to contribute between €2 billion and €3 billion annually to cover the associated costs.
The €90 billion package will be divided into two main pillars: €30 billion in budgetary assistance and €60 billion in military aid. This balance could change if the war comes to an end.
‘Made in Europe’
The procurement of weapons and ammunition was the final point of contention in negotiations among EU ambassadors. France, a vocal advocate of “Made in Europe” policies, pushed to limit purchases outside the continent as much as materially possible.
Ultimately, the loan will follow a so-called “cascade principle”: weapons and ammunition will be purchased within Ukraine, the EU, Iceland, Liechtenstein, Norway, and Switzerland. If the required equipment is not available in these markets, Kyiv will be allowed to turn to other suppliers, such as the United States, to obtain what it needs to fight.
Countries with security and defense partnerships with the EU — including the United Kingdom, Japan, South Korea, and Canada — will also benefit from priority access if they make a “fair and proportional” contribution to the borrowing costs.
This development coincides with a rapprochement between Brussels and London.
“It is important that the United Kingdom is willing to participate,” said an EU official speaking on condition of anonymity. “Given the geopolitical situation, closer ties with the UK are better for Europe. And it will make things more flexible for Ukraine.”
The €90 billion will be disbursed gradually over time and will be subject to strict conditions. For example, any backsliding in Ukraine’s anti-corruption efforts would trigger a suspension of assistance, Euronews reports.
Ukraine will be required to repay the €90 billion only if Russia ends its war of aggression and agrees to compensate Kyiv for the damages. Given that Moscow has categorically ruled out reparations, Brussels is expected to roll over the debt indefinitely, Sinjali reports.
The finalized legal texts approved on Wednesday still require endorsement by the European Parliament, which has pledged to fast-track the procedure. The goal is for the first payment to be made in early April, a deadline proposed by Kyiv.
