European leaders agreed on Friday morning to continue funding it for two years with a 90 billion euro loan, that is, although they failed to agree on using Russian state assets frozen in Europe as collateral for the loan.
This ambitious plan with , as the European heads of state and government could not agree in Brussels, a fact that risked making the European Union appear indecisive at a critical juncture.
Instead, European leaders have announced they will funnel money to Ukraine through a loan covered by the EU budget. Because the plan does not tap into the large stockpile of Russian funds locked up in Europe, it is likely to cost more and prove harder to scale up quickly than the original idea.
But because it still provides much-needed liquidity for Kiev, officials hailed it as a success.
“This will cover Ukraine’s urgent financing needs,” Antonio Costa, president of the European Council, told an early morning news conference in Brussels.
We have a deal.
Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved.
We committed, we delivered.
— António Costa (@eucopresident)
He added that the European Union reserves the right to use frozen Russian assets in the future. European countries took steps last week to freeze those funds indefinitely. For months, European leaders have been hoping to reach an agreement to use 210 billion euros of such assets located in Europe to back the massive loan to Ukraine. The plan was intended to finance much of Kiev’s state and military spending in 2026 and 2027.
However, the idea of such a loan was risky in the first place: Russia has already taken legal action, arguing that it is an illegal seizure of its assets. After weeks of negotiations, Belgium, where most of Europe’s frozen assets are kept, remained skeptical ahead of Thursday’s meeting, fearing it could find itself exposed to Russian retaliation.
The guarantees that Belgium requested to protect itself from this risk, however, proved too much for some other European countries, which were not ready to accept them immediately.
Critical moment for Kyiv
The funding plan comes at a critical time as time was of the essence as money is running out and is expected to run out in 2026 in Ukraine. European officials presented the funding decision as an opportunity to show that they are strong players on the international stage and reliable partners of Ukrainian President Volodymyr Zelensky.
Europeans want a say in how the biggest war their continent has seen in 80 years ends and how peace is secured afterwards. However, President Trump and the Kremlin have often left Europe out of discussions about Ukraine’s future.
In fact, the Trump administration has recently made it clear how negatively it views the European Union. In a national security strategy, he warned that Europe was facing ““, accusing the Union and other supranational organizations of “undermining political freedom” and national sovereignty, allowing uncontrolled immigration and leading the continent on a course that would make it “unrecognizable in 20 years or less”.
Europe’s obstacles
Weeks of negotiations over the frozen assets plan, which ultimately failed, may reinforce the image to the rest of the world that the European Union’s unwieldy structure and the diversity of voices within it remain obstacles to quick action — even in moments of urgency. Ukrainian President Volodymyr Zelensky met with European leaders in Brussels on Thursday as they tried to finalize a deal on frozen assets. He called it “one of the clearest and most morally justifiable decisions that could ever be made,” speaking at a press conference.
The collapse of the frozen asset loan plan was a political blow to both German Chancellor Friedrich Merz and Ursula von der Leyen, president of the European Commission, the Union’s executive arm. Both had strongly supported it.
Nevertheless, the leaders argued that the agreed alternative would serve its purpose. They stressed that Ukraine would not be called upon to repay the loan unless Russia paid war reparations.
Follow live: Press conference with President and Prime Minister Frederiksen following the European Council ↓
— António Costa (@eucopresident)
“This is a decisive message to end the war,” Mr Mertz said in a statement. “Putin will only make concessions when he realizes his war is not working.”
