Europe agreed an interest-free €90 billion ($105 billion) loan to support Ukraine through 2027, with repayments deferred until the war ends and the European Commission authorized to explore using frozen Russian assets as a backstop. The late-night compromise averted a political split and aimed to cover roughly two-thirds of an IMF-projected funding shortfall for Kyiv. Belgium secured binding guarantees amid legal and retaliation concerns, while Russia has launched lawsuits challenging the plan. EU leaders framed the package as essential to European credibility and Ukraine’s ability to sustain military and economic resilience.
Europe Secures €90 Billion Interest-Free Lifeline for Ukraine, Eyes Frozen Russian Assets
Denmark's Prime Minister Mette Frederiksen, European Council President Antonio Costa and European Commission President Ursula von der Leyen hold a press conference during a European Union leaders' summit, in Brussels, Belgium, on Friday, December 19. - Stephanie Lecocq/Reuters
Europe’s leaders negotiated a last-minute, interest-free €90 billion (about $105 billion) loan package designed to keep Ukraine’s economy and armed forces solvent through 2027. The deal — reached after intense, late-night talks in Brussels — prevents Ukraine from making any repayments until the war ends and gives the European Commission a mandate to explore using immobilized Russian state assets as the ultimate source of funding.
Early-Morning Breakthrough
Belgian Prime Minister Bart De Wever, speaking shortly before 4 a.m., warned that a failure to reach agreement would have undercut Europe’s geopolitical relevance. “Had we left Brussels divided today, Europe would have walked away from geopolitical relevance,” he said, calling a split “a total disaster.”
Key Terms and Political Context
The compromise agreed by the EU’s 27 member states includes two central elements: Ukraine will not begin repaying the loan until the war concludes, and the EU reserved the right to use frozen Russian state assets as the ultimate backstop. The Commission now has a mandate to examine legal and practical mechanisms for that option.
For Kyiv, which is simultaneously trying to halt Russian battlefield advances and negotiating with Washington over a peace blueprint, the funds unlocked by the loan will be urgently welcomed. President Volodymyr Zelensky hailed the late-night agreement on social media, saying it “truly strengthens our resilience” and praising the immobilization of Russian assets as a financial guarantee for the coming years.
A serviceman of the National Guard of Ukraine checks ammunition for a Bohdana self-propelled howitzer at a position on a front line in the Kharkiv region, Ukraine, on December 3. - Sofiia Gatilova/Reuters
"This is significant support that truly strengthens our resilience."
— President Volodymyr Zelensky
Why the Loan Was Needed
The International Monetary Fund forecast that, after U.S. funding cuts, Ukraine faced a two-year funding gap of roughly $160 billion (€137 billion). The EU aimed to cover about two-thirds of that shortfall, or approximately $105 billion (€90 billion), through this package and other measures.
Frozen Assets and Legal Risks
The idea of using frozen Russian state assets has circulated since Russia’s 2022 invasion. The EU has so far used interest from immobilized bonds to finance some Kyiv support, but as bonds mature and convert to cash the Commission proposed borrowing that cash to lend to Ukraine until a legal determination or reparations process is complete.
Belgium — which holds a large share of the frozen assets — pressed for binding guarantees from other member states to shield it from potential Russian retaliation or future liability should a peace settlement require returning assets. Belgian leaders insisted verbal promises were insufficient.
Moscow has already taken legal steps: the Russian central bank filed a lawsuit in Belgium against Euroclear seeking billions in damages and warned of claims against European banks for the value of frozen assets and lost profits.
Russia's President Vladimir Putin, accompanied by Kremlin economic envoy Kirill Dmitriev and Kremlin aide Yuri Ushakov, meets with US special envoy Steve Witkoff and US President Donald Trump's son-in-law Jared Kushner at the Kremlin in Moscow on December 2. - Alexander Kazakova/AFP/Getty Images
Transatlantic and Geopolitical Tensions
The negotiations unfolded amid heightened transatlantic friction. A leaked U.S.-backed plan proposed using $100 billion of globally frozen Russian central bank assets for reconstruction efforts in Ukraine — a proposal that alarmed European capitals that control most of those assets. In response, European Commission President Ursula von der Leyen framed the summit as “Europe’s independence moment,” urging the bloc to take responsibility for its own security.
Russian President Vladimir Putin intensified pressure ahead of the summit, publicly insulting European leaders and continuing what analysts describe as a persistent campaign to fragment the continent. Analysts warn that Moscow’s diplomatic and information efforts aim to exploit divisions within the EU.
What This Means for Ukraine
Ukrainian officials said the package bolsters Kyiv’s negotiating position and sustains key military capabilities. Zelensky warned that without the funding, Ukraine’s drone industry and long-range strike capacities — important for operations against energy and military infrastructure — would be severely affected.
By the early hours after the vote, EU capitals breathed a measure of relief. The deal represents a diplomatic lifeline for Kyiv and a test of Europe’s ability to act cohesively under pressure — a signal that the bloc can still marshal substantial financial support for a partner under sustained attack.
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