EU Approves 105 Billion Euros in Loans to Ukraine

European Union leaders agreed on Friday to extend 105 billion euros in interest-free loans to Ukraine over the next two years, providing critical financial support amid its ongoing war with Russia, but they shelved a contentious plan to use frozen Russian assets as collateral.

The decision, reached after extended negotiations in Brussels, addresses Ukraine's pressing budgetary needs for 2026 and 2027. According to International Monetary Fund estimates, Kyiv requires about 161 billion euros during that period to sustain its defense efforts and economy. Without external aid, Ukrainian officials warned, the country risked depleting funds by early 2026, potentially forcing cuts to drone production and other military capabilities. The loans, backed by the EU's own budget, will cover roughly two-thirds of those needs and defer repayment until Russia provides war reparations.

"This will address the urgent financial needs of Ukraine," European Council President Antonio Costa said at a news conference following the summit. The arrangement is expected to cost EU taxpayers around 3 billion euros annually starting in 2028, as the bloc raises common debt to fund the support.