European leaders agree on a multi-year financial package to support Ukraine’s economy and defence as the war with Russia continues.
European Union leaders have finalised a major financial assistance package for Ukraine, approving a €90 billion interest-free loan aimed at supporting the country’s economy and military amid its ongoing war with Russia. The agreement was reached after prolonged negotiations during a high-level EU summit in Brussels.
The loan package, which will be funded through EU-backed borrowing on international financial markets, is designed to provide Ukraine with predictable financial support over the next two years. The funds will be used to cover essential government spending, including public sector salaries, pensions, infrastructure repair, and defence-related costs.
A controversial proposal to use frozen Russian central bank assets as collateral for the loan was ultimately abandoned due to legal and political concerns raised by several member states. Approximately €200 billion in Russian assets remain frozen in Europe following Moscow’s invasion of Ukraine, but disagreements over the legality of using those funds prevented consensus.
Belgium, which hosts a large share of the frozen assets, warned that seizing or leveraging the money could expose the European Union to legal challenges and undermine trust in Europe’s financial institutions. Other countries echoed concerns about possible retaliation from Russia and long-term risks to the eurozone’s credibility.
Despite the setback, EU leaders stressed that frozen Russian assets will remain untouched for now but could still be considered in the future for war reparations or to help offset Ukraine’s reconstruction costs once appropriate legal frameworks are established.
Ukrainian President Volodymyr Zelenskyy welcomed the agreement, calling it a vital step in ensuring Ukraine’s financial stability during wartime. He said the funding would help maintain essential state functions while Ukraine continues to defend its sovereignty.
Ukraine has been facing mounting fiscal pressure as the war drags on, with domestic revenues shrinking and external aid becoming less predictable. Ukrainian officials had warned that without additional funding, the country could face serious budget shortfalls in 2026.
The deal was not unanimously supported. Countries including Hungary and Slovakia raised objections to the scale and structure of the loan but chose not to block the agreement, allowing it to move forward through compromise.
European leaders described the package as a strategic investment in regional security. EU officials said supporting Ukraine is critical to preventing further instability in Europe and sending a clear message of unity against Russian aggression.
The agreement comes as uncertainty grows over the future of US assistance to Ukraine, increasing pressure on Europe to shoulder a greater share of the burden. Analysts say the €90 billion package signals the EU’s intention to play a leading role in sustaining Ukraine through a prolonged conflict.
As the war enters another year with no immediate resolution in sight, the loan deal marks one of the European Union’s strongest financial commitments to Ukraine to date.
Sarah Mitchell is a Senior News Editor at Newslabx, specializing in international relations, global politics, and geopolitical developments. She reviews and curates breaking news stories from reliable sources, ensuring accuracy, balance, and context. Sarah is committed to transparent reporting and editorial integrity, supporting Newslabx’s mission to provide fact-based global news coverage.
