European Union leaders emerged from all-night negotiations in Brussels early Friday having agreed to loan Ukraine €90 billion ($106 billion) to cover military and budget needs for the next two years.
The deal represents a significant show of solidarity with Kyiv, but it comes with an uncomfortable asterisk: the EU abandoned its more ambitious plan to directly tap frozen Russian assets, opting instead for the safer route of joint European borrowing.
“We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved. We committed, we delivered,” European Council President António Costa announced on social media, punctuating weeks of tense negotiations that threatened to expose fractures within the 27-member bloc.
The €200 Billion That Got Away
The original plan was considerably bolder. European leaders had proposed channeling approximately €200 billion in frozen Russian central bank assets into a “reparations loan” for Ukraine. The idea had a certain moral clarity: make Russia pay for its own war by using assets it can no longer access. It was unprecedented in modern history, potentially setting a template for how democracies respond to aggression.
Belgium killed it. The bulk of Russia’s frozen assets, around €185 billion, sit at Euroclear, a securities depository in downtown Brussels. Belgian Prime Minister Bart De Wever demanded guarantees on sharing liability should Russia pursue legal action or retaliate against Belgian institutions. Other EU members balked at assuming that risk.
The Kremlin had threatened exactly that response. Moscow promised legal action and seizure of foreign assets in Russia should the bloc proceed with the plan. In the end, caution prevailed over conviction.
De Wever celebrated the outcome, saying leaders had opted for “chartered waters” when faced with reality. The Kremlin’s top economic negotiator, Kirill Dmitriev, welcomed the failure to “illegitimately use Russian assets,” declaring that “for the time being, the law and common sense have won a victory.”
What Ukraine Actually Gets
The €90 billion loan will be interest-free, raised through joint EU borrowing on capital markets and backed by the bloc’s common budget. Ukraine will not have to repay the loan until it receives war reparations from Russia, which President Volodymyr Zelenskyy has estimated would cost Moscow over €600 billion.
“If Russia does not pay reparations we will, in full accordance with international law, make use of Russian immobilized assets for paying back the loan,” German Chancellor Friedrich Merz said, suggesting the asset question may resurface down the line.
The frozen assets will remain immobilized indefinitely, a symbolic reminder of what could have been.
For context, the International Monetary Fund estimates Ukraine needs €137 billion in 2026 and 2027. The EU package covers roughly two-thirds of that requirement. Kyiv is on the verge of bankruptcy and desperately needed financing by spring. Polish Prime Minister Donald Tusk framed the stakes bluntly at the summit’s outset: “Either money today or blood tomorrow.”
The Holdouts and the Opt-Outs
Not everyone signed on enthusiastically. Hungary, Slovakia, and the Czech Republic refused to support Ukraine and opposed the loan package. They were bought off with exemptions: through “enhanced cooperation” mechanisms, any mobilization of EU budget resources as a guarantee for the loan will not impact their financial obligations.
Hungarian Prime Minister Viktor Orbán, who maintains the closest EU relationship with Vladimir Putin and styles himself a peacemaker, said he would not support a “European Union in war.” His position: “To give money means war.”
The text of the summit conclusions notes that 25 of 27 heads of state firmly supported the package. The diplomatic language around the holdouts suggests a bloc straining to maintain unity while accommodating members with fundamentally different views on Russian aggression.
Europe’s Diminishing Role in Peace Talks
The financial package arrives against a backdrop of growing European marginalization in efforts to end the war. The Trump administration has pushed its own negotiating track with Moscow, largely sidelining European partners despite their geographic proximity and security stakes.
French President Emmanuel Macron suggested it was time for Europe to start talking directly to Moscow. Zelenskyy announced that Ukrainian and U.S. delegations would hold new talks Friday and Saturday in Washington, with Kyiv pressing for clarity on what security guarantees America would actually provide.
“What will the United States of America do if Russia comes again with aggression?” Zelenskyy asked at the summit. “What will these security guarantees do? How will they work?”
The questions underscore a fundamental uncertainty: European money can keep Ukraine fighting, but it cannot determine how or when the fighting ends. That leverage increasingly belongs to Washington and, by extension, to whatever terms President Trump finds acceptable.
The Signal to Moscow
European leaders framed the loan as a message to the Kremlin. “This sends a clear signal from Europe to Putin: This war will not be worth it,” Merz declared.
Whether Putin receives that message is another matter. The failure to seize Russian assets represents a clear victory for Kremlin pressure tactics. The EU blinked first. And while €90 billion is substantial, it is also finite, time-limited, and comes with the implicit acknowledgment that Europe was not willing to cross certain lines.
Zelenskyy put on a gracious face, thanking EU leaders for support that “truly strengthens our resilience.” Behind closed doors, Ukrainian officials must recognize that the bold precedent they hoped for, using aggressor assets to fund defense against that aggressor, remains theoretical.
What Happens Next
The European Council will revisit the Ukraine question at its next meeting. The reparations loan concept lives on in the bureaucratic background, with technical and legal work continuing on how such a scheme might eventually function. But for now, the EU has chosen conventional debt over unconventional justice.
The money will start flowing to Kyiv by spring 2026, covering military procurement, budget shortfalls, and the basic costs of keeping a country functioning while under invasion. It is necessary aid. Whether it is sufficient to alter the trajectory of a war approaching its fourth year remains the question no summit can answer.
Meanwhile, €200 billion in Russian assets sit frozen in Brussels, Brussels remains nervous about liability, and the Kremlin celebrates a tactical win in the court of international economic opinion.
Sometimes the most revealing thing about a deal is what it doesn’t do.
Sources: NPR, Bloomberg, NBC News, Al Jazeera, Reuters, European Council, Euronews, The National