EU Council Approves Major Loan to Support Ukraine’s Budget, Defense
The agreement, reached through enhanced cooperation among 24 EU member states, is intended to back both Ukraine’s general budget and its military requirements, according to reports. The Council is seeking swift approval from the European Parliament so that the first installment can be released early in the second quarter of this year.
Under the framework, €30 billion ($35.5 billion) will be allocated as macroeconomic support via the EU’s Ukraine Facility or other macro-financial assistance programs, while €60 billion ($70.5 billion) will focus on bolstering defense industrial capabilities and financing the procurement of military equipment.
Funding will mainly come from EU borrowing on capital markets and will be guaranteed by the EU budget. Loan repayments are only expected once Russia provides “war reparations” to Ukraine. To ensure favorable terms and protect debt sustainability, interest costs will be covered by the EU budget, placing no additional burden on the Czech Republic, Hungary, or Slovakia, which opted out of the enhanced cooperation.
European Commission President Ursula von der Leyen praised the decision on social media, calling it “a powerful symbol of our ironclad solidarity with Ukraine as we approach four years since Russia’s full-scale invasion began.” She added that the support “will further strengthen Ukraine’s position on the battlefield -- and its hand at the negotiating table.”
Ukraine’s projected funding needs for 2026–2027 total €135.7 billion ($159.5 billion), with the EU covering roughly two-thirds and the remainder expected from other international partners, particularly the G7 countries.
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