EU leaders have struck a deal to provide Ukraine with a loan of €90 billion ($105.35 billion) to plug its looming budget shortfalls, but failed to agree on using frozen Russian assets.
The middle-of-the-night agreement reached at summit talks in Brussels offers Kyiv a desperately needed lifeline as US President Donald Trump pushes for a quick deal to end the war with Russia.
“Today's decision will provide Ukraine with the necessary means to defend itself and to support the Ukrainian people,” said European Council head Antonio Costa, who chaired the summit.
Ukrainian President Volodymyr Zelenskyy wrote on X that the deal “is significant support that truly strengthens our resilience”. He added: “It is important that Russian assets remain immobilised and that Ukraine has received a financial security guarantee for the coming years.”
In a post on Telegram, the Kremlin's top economic negotiator, Kirill Dmitriev, welcomed the failure to “illegitimately use Russian assets to finance Ukraine”. He added that “for the time being, the law and common sense have won a victory”.
After scrambling around for a solution, EU leaders settled on a loan for the next two years backed by the bloc's common budget.
The number one option on the table had been to tap around €200 billion ($234.11 billion) of Russian central bank assets frozen in the EU to generate a loan for Kyiv.
But that scheme fell by the wayside after Belgium, where the bulk of the assets are held, demanded guarantees on sharing liability – something that proved too much for other countries.
Belgian Prime Minister Bart De Wever said “rationality has prevailed”.
“This whole business was so risky, so dangerous, and raised so many questions – it was like a sinking ship, like the Titanic,” he said. “The die is cast now – and everyone is relieved.”
German Chancellor Friedrich Merz had pushed hard for the asset plan, but still said the final decision on the loan “sends a clear signal” to Russian President Vladimir Putin.
European Commission President Ursula von der Leyen said Ukraine would only need to repay the loan once Moscow compensates for the damage it has caused.
Using joint debt requires a unanimous decision by the EU's 27 countries, and sceptics Hungary, Slovakia and the Czech Republic were given an exemption from the commitment to avoid a blockage.
Hungarian Prime Minister Viktor Orban, who is Mr Putin’s closest ally in Europe, said: “I would not like a European Union in war. To give money means war.”
He also described the rejected plan to use the frozen Russian assets as a “dead end”.
Staying afloat
The EU estimates Ukraine needs an extra €135 billion ($158 billion) to stay afloat over the next two years, with the cash crunch set to start in April.
Mr Zelenskyy told EU leaders at the start of the summit on Thursday that using Russian assets was the right approach.
“Russian assets must be used to defend against Russian aggression and rebuild what was destroyed by Russian attacks. It's moral. It's fair. It's legal,” he said.
While Kyiv may be left disappointed that the EU did not take the leap with the assets, securing financing another way was still a relief.
Mr Zelenskyy told the leaders that Kyiv needed a decision by the end of the year, and that putting his country on firmer footing could give it more leverage in talks to end the war.
US talks
Alongside the EU's discussions, Washington has pushed its own effort to forge a deal to end the war.
The US has so far largely sidelined Europe from the negotiations, but French President Emmanuel Macron said it was time for the continent to start talking to Moscow.
“I believe that it's in our interest as Europeans and Ukrainians to find the right framework to re-engage this discussion,” Mr Macron said. Europeans should find the means to do so “in the coming weeks”, he added.
Mr Zelenskyy announced Ukrainian and US delegations would hold new talks on Friday and Saturday in the United States.
He said he wanted Washington to give more details on the guarantees it could offer to protect Ukraine from another invasion.
“What will the United States of America do if Russia comes again with aggression?” he asked. “What will these security guarantees do? How will they work?”
Mr Trump nonetheless kept the pressure on Kyiv, saying again he hopes Ukraine “moves quickly” to agree a deal.
