EU Leaders Agree on €90 Billion Interest-Free Loan for Ukraine

Historic Agreement Reached in Brussels

In the early hours of Friday, December 19, 2025, European Union leaders concluded a summit in Brussels by agreeing to provide Ukraine with a substantial interest-free loan of 90 billion Euros. This critical financial package is intended to cover Ukraine's military and budgetary needs for the years 2026 and 2027, offering a vital lifeline as the conflict approaches its fifth year. European Council President António Costa confirmed the deal, stating, 'We committed, we delivered.'

Details of the Financial Package

The newly approved aid package will see the EU borrow the 90 billion Euros on capital markets, backed by the bloc's common budget. This approach was adopted after an initial proposal to use frozen Russian state assets to secure the loan failed to gain unanimous support among member states. The loan is interest-free, and Ukraine will only be required to repay it once Russia has paid reparations for war damages. Should Russia fail to provide reparations, the frozen Russian assets will remain immobilized and could be used to repay the loan.

Compromise Amidst Divisions

The agreement represents a significant compromise following weeks of intense negotiations and a summit that stretched into the night. The primary sticking point was the plan to leverage approximately 210 billion Euros in frozen Russian assets, largely held in Belgium. Countries like Belgium expressed concerns over potential legal vulnerabilities and the risk of Russian retaliation, leading to the shelving of the direct use of these assets for the loan. Despite initial opposition from some nations, including Hungary, Slovakia, and the Czech Republic, a consensus was ultimately reached, ensuring the aid package would not be blocked.

International Reactions and Germany's Role

Ukrainian President Volodymyr Zelenskyy welcomed the decision, expressing gratitude to the EU leaders and emphasizing that the support 'truly strengthens our resilience.' From Germany, Chancellor Friedrich Merz hailed the agreement, stating that the financial package for Ukraine was now in place and that the interest-free loan sends a 'clear signal from Europe to Putin: This war will not be worth it.' Merz had been a proponent of finding a robust solution for Ukraine's financing, initially advocating for the use of frozen Russian assets, but ultimately supported the compromise that emerged. The International Monetary Fund estimates that Ukraine will require approximately 137 billion Euros in 2026 and 2027, highlighting the critical nature of this EU commitment.