EU agrees €90bn Ukraine loan without using Russian assets

EU leaders have agreed to raise a €90bn loan to fund Ukraine for the next two years, but stopped short of adopting a proposal to use tens of billions of euro in frozen Russian assets to underwrite a long-term funding package.

Belgium, which hosts the bulk of the Russian assets via the securities company Euroclear, had sought open-ended guarantees that it would not be exposed should Russia launch a successful legal claim against the use of its assets.

The deal was struck in Brussels in the early hours of the morning.

EU leaders were yesterday initially looking at two options to ensure Ukraine does not run out of money in the second quarter of next year.

One was to raise a loan on the international markets backed by unused funds in the EU budget, the second was to use up to €210bn of immobilised Russian assets.

As the day progressed it looked like the latter option was the main focus.

Technical teams worked non stop to find ways to provide financial guarantees to Belgium should, what has been described as the highly unlikely scenario of Russia winning an international arbitration case that could be enforced in the European Union, come to pass.

However, by late last night those efforts fell short. The other option was then revived - essentially joint EU debt backed by untapped funds from the seven year budget.

That had seemed unlikely as it would need the unanimous support of all member states.

However, Russia-friendly member states Hungary, Slovakia and now the Czech Republic agreed they would not block the move, so long as they were not involved in the joint debt option.

Last night, EU leaders insisted the Russian assets would remain frozen and that if Russia did not pay reparations to Ukraine in a post war scenario, then those assets could be used by Ukraine to repay the EU loan.

The agreement, which came after more than a day of talks at a summit in Brussels, offers Kyiv a desperately needed lifeline as US President Donald Trump pushes for a quick deal to end Russia's war.

"We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved," EU chief Antonio Costa wrote on X.

"We committed, we delivered," he added.

German Chancellor Friedrich Merz had pushed hard for the asset plan - but still said the final decision on the loan "sends a clear signal" to Russian President Vladimir Putin.

The EU estimates Ukraine needs an extra €135bn to stay afloat over the next two years, with the cash crunch set to start in April.

In a post on X, Ukraine's President Volodymyr Zelensky said he was grateful to "all leaders of the European Union for the European Council's decision on €90 billion in financial support for Ukraine in 2026–2027".

He said: "This is significant support that truly strengthens our resilience. It is important that Russian assets remain immobilized and that Ukraine has received a financial security guarantee for the coming years.

"Thank you for the result and for unity. Together, we are defending the future of our continent."

Mr Zelensky had told EU leaders at the start of the summit yesterday that using Russian assets was the right way to go.

"Russian assets must be used to defend against Russian aggression and rebuild what was destroyed by Russian attacks. It's moral. It's fair. It's legal," Mr Zelensky said.

While Kyiv may be left disappointed that the EU did not take the leap to use the Russian assets - securing financing another way will still be a relief.

Mr Zelensky told the leaders that Ukraine needed a decision by the end of the year, and that putting his country on a firmer financial footing could give it more leverage in talks to end the war.

Bubbling close to the surface of the EU's discussion are the US efforts to forge a deal to end the war.

Mr Zelensky announced Ukrainian and US delegations would hold new talks tomorrow and Saturday in the United States.

He said he wanted the US to give more details on the guarantees it could offer to protect Ukraine from another invasion.

"What will the United States of America do if Russia comes again with aggression?" he asked.

"What will these security guarantees do? How will they work?"

Mr Trump nonetheless kept the pressure on Kyiv, saying again he hopes Ukraine "moves quickly" to agree a deal ahead of fresh talks expected in Miami at the weekend.

"Well, they're getting close to something, but I hope Ukraine moves quickly. I hope Ukraine moves quickly because Russia is there," Mr Trump told reporters in the Oval Office.

"And you know, every time they take too much time, then Russia changes their mind."

Russia has yet to react to the latest proposals and Mr Putin has repeated that the Kremlin intends to pursue its maximalist military aims in Ukraine.

Ukraine and the United States say there has been progress on the question of future security guarantees for Kyiv, but there are disagreements on what territory Ukraine would have to cede.

Additional reporting AFP