European Union Finally Agreed to Provide a Loan of 106 Billion US Dollars to Ukraine

EU leaders on Friday agreed to provide Ukraine with a large interest-free loan to meet its military and economic needs over the next two years.

But the EU failed to bridge the gap with Belgium, which allowed them to use frozen Russian assets to raise the funds.

After nearly four years of war, the International Monetary Fund estimates Ukraine will need 137 billion euros ($161 billion) in 2026 and 2027. The government in Kyiv is on the verge of bankruptcy, and desperately needs the money in the spring.

The plan is to use part of Russia's assets worth 210 billion euros ($246 billion) that have been frozen in Europe, mostly in Belgium.

The leaders worked late into Thursday to reassure Belgium they would protect it from Russian retaliation if it backed the "loan for reparations" plan. But in the end the leaders did not use that option, but as talks stalled, the leaders eventually chose to borrow money on the capital market.

"We have reached an agreement. The decision to provide support of 90 billion euros (106 billion US dollars) to Ukraine for 2026-2027 has been approved. We have committed, and we have kept our promise," said President of the European Council António Costa in a social media post reported by the Associated Press, Friday, December 19.

Not all countries agreed to the loan package. Hungary, Slovakia, and the Czech Republic refused to support Ukraine and opposed it, but an agreement was reached in which they did not block the package and promised protection from any financial impact.

Hungarian Prime Minister Viktor Orbán, who is Russia's closest ally in Europe and claims to be a peacemaker, said, "I don't want the EU to be in a war."

"Giving money means war," Orbán said. He also described a rejected plan to use frozen Russian assets as a "dead end."

French President Emmanuel Macron said the deal was a major advance, saying borrowing on the capital markets "is the most realistic and practical way" to fund Ukraine and its war effort.