The EU takes on a collective debt of 90 billion euros to support Ukraine

The European Commission announced a new Ukrainian loan on Wednesday after EU leaders decided in December not to use frozen Russian central bank funds to support Ukraine.

On Wednesday, the Commission presented Ukraine with a support loan of EUR 90 billion for the years 2026-2027. Based on the IMF’s estimates, it would cover about two-thirds of Ukraine’s financial needs in the next two years.

About 60 billion of the loan is to be allocated to Ukraine’s military aid and about 30 billion to general budget support. The goal is to strengthen Ukraine’s defense capability and secure basic state functions and public services.

According to the Commission, the aid to Ukraine is financed by the EU’s joint borrowing from the capital market. The loan is guaranteed by the buffer fund of the EU budget, as in previous support programs for Ukraine.

The Czech Republic, Hungary and Slovakia do not participate in the joint loan taken from the EU member states to support Ukraine.

According to the commission, the support package is conditional. It means that Ukraine must respect the rule of law and strengthen anti-corruption activities.

Ukraine is required to make defense purchases with the loan primarily from the European market, but if it cannot find the material it needs there, purchases can also be made elsewhere. France, in particular, has wanted arms purchases to be made from the European market and not from the US market.

The war reparations loan failed

At the December summit, the EU countries decided to support Ukraine with a joint debt after the war compensation loan based on Russia’s frozen assets, planned as the primary form of support, failed, especially due to opposition from Belgium.

President of the EU Commission Ursula von der Leyen said on Wednesday that the war compensation loan to Ukraine based on frozen Russian funds is still being processed. It serves as a reminder to Russia that the EU reserves the right to use funds frozen from Russia.

According to the commission, the funds will remain frozen until the end of the war and the payment of reparations. This is also reflected in the fact that Ukraine does not have to pay back the loan before Russia starts paying war reparations.

Next, the Commission’s proposal will be discussed in the EU Parliament and member states. The Commission hopes that they will make decisions on the matter quickly, because the payment of the loan to Ukraine is supposed to start in April. Otherwise, Ukraine risks running out of money.