EU Approves €90 Billion Zero-Interest Loan to Ukraine, Avoids Using Frozen Russian Assets
EU approves massive loan without touching frozen assets.
European Union leaders reached an agreement on December 19, 2025, during a Brussels summit to extend a 90-billion-euro loan to Ukraine, aimed at addressing the country's critical budget deficits for 2026 and 2027. The zero-interest loan, backed by the EU's common budget, provides essential financial support amid ongoing conflict and uncertainty over future international aid. EU chief Antonio Costa confirmed the deal, emphasizing the bloc's commitment to delivering on promises made to Kyiv.
The decision followed extended negotiations, with leaders opting against using profits from approximately 200 billion euros in frozen Russian central bank assets, primarily held in Belgium. Concerns over legal risks and potential Russian retaliation led to the abandonment of that approach, despite initial preferences from several member states and Ukrainian President Volodymyr Zelenskyy. Instead, the package includes protective mechanisms for countries such as Hungary, Slovakia, the Czech Republic, and Belgium to shield them from any adverse financial consequences.
French President Emmanuel Macron praised the outcome as a practical and realistic solution to sustain Ukraine's military and budgetary requirements. German Chancellor Friedrich Merz highlighted that the funds would sufficiently cover Ukraine's needs for the next two years, while reiterating that frozen Russian assets would remain immobilized until Moscow pays reparations, estimated by Kyiv to exceed 600 billion euros. Merz noted that, should Russia refuse compensation, the assets could legally be utilized to repay the loan in accordance with international law.
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Zelenskyy, addressing the summit, advocated strongly for employing Russian assets, describing it as a moral, fair, and legal imperative to fund defense and reconstruction efforts damaged by Russian aggression. Although the EU's choice to secure alternative financing may disappoint Ukrainian leadership, the timely approval offers crucial stability, particularly as Kyiv faces an estimated 135 billion euro shortfall over the coming years, with pressures intensifying from April 2026.
The agreement unfolds against the backdrop of U.S. President Donald Trump's push for a swift resolution to the war, prompting upcoming bilateral talks between Ukrainian and American delegations. Zelenskyy sought clarity on potential U.S. security guarantees to prevent future aggression, while Trump urged Ukraine to accelerate negotiations. The EU's financial commitment reinforces transatlantic solidarity, ensuring Ukraine's resilience as diplomatic efforts to end the conflict continue.
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