EU Agrees €90 Billion Loan for Ukraine’s Defence, Sidesteps Use of Frozen Russian Assets

European Union leaders have agreed to borrow €90 billion ($105 billion) to provide loans to Ukraine for its defence against Russia over the next two years, opting for EU-backed borrowing rather than tapping frozen Russian sovereign assets amid political and legal divisions.

The decision was reached after overnight talks at an EU summit in Brussels on Friday, marking a compromise aimed at keeping Ukraine financially afloat while preserving unity within the bloc.

“Today we approved a decision to provide €90 billion to Ukraine,” European Council President Antonio Costa told reporters. “As a matter of urgency, we will provide a loan backed by the European Union budget.”

Russian Assets Remain Frozen

EU leaders reaffirmed that Russian state assets worth around €210 billion held within the bloc will remain frozen until Moscow pays war reparations to Ukraine. Should such payments ever materialise, Kyiv could then use the funds to repay the EU loan.

The leaders also instructed the European Commission to continue exploring a so-called reparations loan based on immobilised Russian assets, but acknowledged that the option is not viable for now.

The main obstacle is Belgium, where approximately €185 billion of the frozen Russian assets are held. Belgian officials have sought strong legal and financial guarantees to shield the country from potential Russian retaliation.

“There were so many questions on the reparations loan that we had to move to Plan B,” Belgian Prime Minister Bart De Wever said. “The EU avoided chaos and division and remained united.”

Hungary Drops Objections

Joint EU borrowing initially appeared unlikely because it requires unanimous approval and had been opposed by Hungary’s Prime Minister Viktor Orban, who maintains closer ties with Moscow.

However, Hungary, along with Slovakia and the Czech Republic, agreed not to block the plan after securing assurances that the scheme would not impose direct financial obligations on them.

“Orban got what he wanted: no reparations loan, and EU action without Hungary’s financial participation,” one EU diplomat said.

Urgency Over Ukraine Funding

The stakes were high for the EU, with officials warning that Ukraine could run out of money by the second quarter of next year without sustained European support — a scenario the bloc fears could tilt the war in Russia’s favour and increase the risk of broader instability in Europe.

“This is good news for Ukraine and bad news for Russia,” German Chancellor Friedrich Merz said. “That was our intention.”

Several leaders stressed that the decision was necessary not only to support Kyiv, but also to demonstrate Europe’s resolve after U.S. President Donald Trump recently criticised European allies as “weak.”

“We simply cannot afford to fail,” EU foreign policy chief Kaja Kallas said.

Zelenskiy Pushes for Asset Seizure

Ukrainian President Volodymyr Zelenskiy, who attended the summit, again urged the EU to go further by fully using frozen Russian assets to finance Ukraine’s defence.

“The decision to use Russian assets to defend against Russian aggression is one of the clearest and most morally justified decisions that could be made,” Zelenskiy said.

For now, EU leaders have chosen a pragmatic route, prioritising speed and unity over legal experimentation, while keeping the Russian asset option on the table for the future.