EU agrees €90bn loan to Ukraine after frozen Russian asset plan fails

EU leaders approved a €90bn loan to Ukraine, raised on capital markets and backed by the bloc's shared budget, following the collapse of a plan to use €210bn in frozen Russian sovereign assets.The decision came after marathon talks in Brussels, where Belgium rejected the assets-based proposal due to demands for extensive guarantees against financial risks, prompting leaders to pivot to budget-backed borrowing.

The loan provides funding for Ukraine over the next two years and serves as vital support amid warnings from Kyiv of potential collapse in early 2026 without aid. Ukraine repays only after Russia provides reparations, with immobilized Russian assets potentially used if Moscow refuses.“We committed, we delivered,” stated European Council president António Costa.

French President Emmanuel Macron called the lack of agreement a potential disaster and pushed for direct European dialogue with Russia in peace talks. Ukraine's first deputy foreign minister Sergiy Kyslytsya welcomed the outcome, noting “‘Perfect is the enemy of good’” and praising the workable result.

The deal exempts Czech Republic, Hungary, and Slovakia from financial obligations, while Russian President Vladimir Putin criticized the asset freeze as theft undermining euro confidence.German Chancellor Friedrich Merz called it a practical solution equivalent in impact to the rejected plan.