European Union leaders have agreed to borrow €90 billion to finance Ukraine’s defense against Russia over the next two years, abandoning for now a contentious plan to use frozen Russian state assets.
The decision was reached after hours of talks in Brussels, EU summit chairman Antonio Costa said early on Friday. The loan will be backed by the EU budget and delivered as a matter of urgency to prevent Ukraine from running out of funds next year.
Leaders had explored using Russian sovereign assets immobilized in the EU to fund Kyiv, but divisions and legal concerns proved insurmountable at this stage. The European Commission was nevertheless mandated to continue work on a so-called reparations loan linked to those assets.
Russian funds worth €210 billion will remain frozen in the EU until Moscow pays war reparations to Ukraine, leaders said. Should that happen, Ukraine could use the assets to repay the loan.
The borrowing plan required unanimity and initially faced opposition from Hungary’s Russia-friendly Prime Minister Viktor Orban. Hungary, along with Slovakia and the Czech Republic, ultimately agreed to let the scheme proceed on the condition it would not have financial consequences for them.
“This is good news for Ukraine and bad news for Russia, and this was our intention,” German Chancellor Friedrich Merz said.
Belgium played a central role in the talks because €185 billion of the frozen Russian assets are held there. Belgian Prime Minister Bart De Wever said concerns over financial and legal risks from potential Russian retaliation made the reparations loan too complex for now.
“There were so many questions on the reparations loan, we had to go to Plan B,” De Wever said. “The EU has avoided chaos and division and remained united.”
The stakes were high for the bloc. Without EU financial support, Ukraine would likely run out of money in the second quarter of next year, raising fears in Brussels that Russia could prevail and pose a greater security threat to the EU.
The decision also came amid strained public finances across the bloc and growing pressure to demonstrate European resolve, after U.S. President Donald Trump last week described European countries as “weak”.
“We just can’t afford to fail,” EU foreign policy chief Kaja Kallas said.
Ukrainian President Volodymyr Zelenskiy, who joined the summit, urged leaders to go further by fully using Russian assets to fund Ukraine’s defence, calling it a morally justified step. For now, EU leaders have chosen borrowing as the fastest way to keep Ukraine fighting while preserving unity within the bloc.
