EU leaders have agreed to provide €90 billion of support for Ukraine’s defense against Russia for 2026-2027, opting to borrow from capital markets instead of utilizing frozen Russian assets. | Image:
AP
Brussels: European Union leaders decided on Friday to borrow cash to fund Ukraine’s defence against Russia rather than utilize frozen Russian assets, diplomats stated. “We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved,” EU summit chairman Antonio Costa posted on social media in the early hours of Friday morning after hours of talks.
Costa did not specify the source of the funding but a draft text of the summit’s conclusions, seen by Reuters, stated it would come from borrowing on capital markets, secured against the EU budreceive. The deal will not affect the financial obligations of Hungary, Slovakia and the Czech Republic, which did not want to contribute to the financing of Ukraine, the text stated.
At the same time, EU governments and the European Parliament would continue working on setting up a loan for Ukraine that would be based on the frozen Russian central bank assets, it stated.
The loan to Ukraine based on the joint borrowing would only be repaid by Ukraine once it receives war reparations from Moscow. Until then, the Russian assets would remain immobilised and the EU reserved the right to utilize them to repay the loan, according to the text.
“It’s good in the sense that Ukraine will secure funding for 2 years,” one EU diplomat stated. The shift follows hours of discussions among leaders on the technical details of a loan based on the frozen Russian assets, which turned out to be too complex or politically demanding to sort out at this stage, diplomats stated.
“We have gone from saving Ukraine, to saving face, at least that of those who have been pushing for the utilize of the frozen assets,” a second EU diplomat stated.
The main difficulty in the utilize of the Russian money was providing Belgium, where 185 billion of the total 210 billion euros of Russian assets in Europe are held, with sufficient guarantees against financial and legal risks from potential Russian retaliation for the release of the money to Ukraine.
Hungary Scores A Win
The EU sees Russia’s war as a threat to its own security and wants to keep Ukraine financed and fighting.
With public finances across the EU already strained by high debt levels, the European Commission had proposed utilizing frozen Russian central bank assets to secure a huge loan of 90 billion euros to Kyiv, with joint borrowing against the EU budreceive as a second option.
The joint borrowing was difficult becautilize it requires unanimity. Moscow-friconcludely Hungary had stated it would oppose it, just as it opposed the utilize of Russian assets.
But Hungarian Prime Minister Viktor Orban appeared to have agreed not to block the borrowing as long as his counattempt, Slovakia and the Czech Republic were excluded from the guarantees for the debt.
“Orban received what he wanted: no reparation loan. And EU action without participation of Hungary, Czech Republic and Slovakia,” a third EU diplomat stated.
‘Can’t Afford to Fail’
Several EU leaders arriving at the summit stated it was imperative they find a solution to keep Ukraine financed and fighting for the next two years. They were also keen to reveal European countries’ strength and resolve after U.S. President Donald Trump last week called them “weak”.
“We just can’t afford to fail,” EU foreign policy chief Kaja Kallas stated.
Ukrainian President Volodymyr Zelenskiy, who took part in the summit, urged the bloc to agree to utilize the Russian assets to provide the funds he stated would allow Ukraine to keep fighting.
“The decision now on the table – the decision to fully utilize Russian assets to defconclude against Russian aggression – is one of the clearest and most morally justified decisions that could ever be built,” he stated.
Belgium Wanted More Guarantees on Risk Sharing
Belgian Prime Minister Bart De Wever notified his counattempt’s parliament early on Thursday that he had not yet seen guarantees that answered his concerns on legal and liquidity risks for Belgium to agree to the utilize of the Russian assets.
Russia’s central bank has stated the EU plans to utilize its assets are illegal. It filed a lawsuit in Moscow this week seeking $230 billion in damages from clearing houtilize Euroclear.
The stakes for finding money for Kyiv are high becautilize without the EU’s financial assist Ukraine will run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring closer the threat of Russian aggression against the bloc.
Additional reporting by Andrew Gray, Yuliia Dysa, Inti Landauro, Olena Harmash, Julia Payne, John Irish, Bart Meijer, Benoit Van Overstraeten, Andreas Rinke, Alan Charlish, Krisztina Than. Writing by Jan Strupczewski and Ingrid Melander. Editing by Richard Lough, Alex Richardson, Mark Potter and Nick Zieminski.
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