European Union leaders have approved a €90 billion loan package for Ukraine to support its military operations and stabilise its economy, following prolonged negotiations that failed to produce consensus on using frozen Russian assets.
The agreement was reached after more than a day of intense discussions at a high-level European Council summit in Brussels, where divisions among member states once again surfaced over how far the bloc should go in funding Ukraine’s war effort. Instead of seizing Russian state assets frozen within the EU, leaders opted to provide a large-scale loan backed by the EU’s common budget.
European Council President Antonio Costa announced the deal on social media, describing it as a demonstration of unity and resolve. He said the European Union had “committed” to supporting Ukraine and had now “delivered” at a critical moment in the war.
The decision comes as Ukraine faces mounting financial pressure amid Russia’s continued military offensive. Ukrainian President Volodymyr Zelensky had strongly advocated for the use of approximately €200 billion in frozen Russian assets, most of which are held in Belgium-based financial institutions. Kyiv has repeatedly argued that Moscow should pay for the destruction caused by its invasion.
However, Belgium raised concerns about potential legal and financial risks, insisting that any move to seize the assets must come with liability-sharing guarantees from other EU member states. Several governments were unwilling to accept such commitments, fearing legal challenges and long-term economic consequences. The deadlock ultimately forced leaders to abandon the idea for now.
Zelensky welcomed the €90bn loan, calling it “significant support that truly strengthens our resilience,” while reiterating that frozen Russian assets should remain immobilised until a future legal framework is agreed upon. He stressed that Ukraine’s survival depends on sustained international backing, especially as the war enters another difficult phase.
Belgian Prime Minister Bart De Wever defended the outcome, saying the decision to rely on borrowing rather than asset seizure helped the EU avoid internal conflict. “This approach prevented chaos and division,” he said, adding that European unity had been preserved during a sensitive moment.
Ukraine’s financial outlook remains fragile. Zelensky has warned that without fresh funding by the spring of next year, the country could be forced to scale back critical drone production, a key element of its defence strategy against Russian forces. EU officials estimate that Ukraine will need at least €135 billion in additional funding over the next two years to maintain basic government operations and sustain its military.
According to EU projections, financial pressure on Kyiv is expected to intensify from April, when existing aid packages begin to expire. The newly approved loan is expected to provide short-term relief, buying Ukraine time as it seeks further international support.
German Chancellor Friedrich Merz said the agreement sent a “clear signal” to Russian President Vladimir Putin that Europe remains firmly behind Ukraine. He emphasised that the EU would continue to stand by Kyiv politically, militarily, and economically for as long as necessary.
Polish Prime Minister Donald Tusk also welcomed the decision, urging fellow leaders to “rise to this occasion” despite repeated warnings from Moscow against using Russian assets. The Kremlin has consistently threatened retaliation should its frozen funds be confiscated, a factor that continues to weigh heavily on European decision-making.
The loan agreement follows months of debate within the EU over how to finance long-term support for Ukraine without overburdening national budgets. Some member states had pushed for a more aggressive approach involving asset seizures, while others favoured legally safer mechanisms such as loans and guarantees.
The issue of frozen Russian assets remains unresolved and is likely to return to the agenda in future summits. Several EU officials have acknowledged that while political will exists to make Russia pay for the war, the legal framework required to do so remains complex and contentious.
The €90bn loan also comes amid renewed diplomatic activity aimed at ending the conflict. The United States has recently re-engaged in talks with both Ukrainian and European officials, signalling a push for intensified diplomacy alongside continued military aid. Further discussions between Ukrainian and American representatives are expected in the coming days.
Despite these efforts, fighting on the ground shows little sign of easing. Ukrainian officials say sustained funding is essential not only for defence but also for maintaining public services, paying salaries, and keeping the economy afloat during wartime.
EU leaders insist that the loan reflects their long-term commitment to Ukraine’s sovereignty and security. While the decision to avoid using frozen Russian assets has drawn criticism from some quarters, supporters argue that preserving unity within the bloc is crucial as the war drags on.
As Ukraine braces for another challenging year, the EU’s latest move provides a crucial lifeline, even as debates over responsibility, accountability, and burden-sharing continue to shape Europe’s response to the conflict.
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