The European Unionhas detailed a vast new €90-billion loan package for Ukraine aimed at keeping the country’s economy afloat and strengthening its defence as Russia’s invasion approaches its fifth year.
Around two-thirds of the funds, about €60 billion euros, will be used to support Kyiv’s military, while the remaining €30 billion euros will cover general budget needs, including public sector salaries and energy subsidies.
The European Commission said it hopes to make the first payment in April, pending approval from the European Parliament and EU member states.
“With this support, Ukraine can bolster its defence on the battlefield while keeping the state and basic services running,” EU Commission President Ursula von der Leyen told reporters in Brussels on Wednesday.
She said the funds would primarily finance weapons and equipment produced in Ukraine or within the EU, a move designed to sustain Europe’s defence industry and reduce reliance on the United States.
If certain equipment is unavailable or cannot be delivered quickly enough from European suppliers, Kyiv may be allowed to source it from outside the continent.
However, any such exceptions will require prior notification to an expert group to maintain what officials call a “Made in Europe” principle.
As Europe pours money into defence, reliance on US remains a sticking point
Frozen Russian assets
The loan package, backed by the EU’s common budget, follows months of talks after an earlier plan to finance Ukraine using frozen Russian assets failed to gain unanimous support.
Belgian Prime Minister Bart De Wever had opposed the use of the roughly €210 billion in immobilised Russian central bank funds, most of which are held under Belgian jurisdiction.
The new scheme exempts Hungary, Slovakia and the Czech Republic from underwriting the joint debt to secure unanimous agreement.
Brussels will cover the annual interest costs, estimated at around €3–4 billion, using leftover EU funds, with member states stepping in if those fall short.
“This is a lot of money – billions being invested – and these investments should have a return in jobs, in research and development,” von der Leyen said, linking the loan to Europe’s security and industrial capacity.
According to EU officials, negotiations with G7 partners are under way to ensure other Western donors frontload their financial assistance to Ukraine in the first quarter of 2026, helping plug immediate shortfalls before the EU loan begins to flow.
(with newswires)
