European Union ambassadors have agreed on the structure of a €90 billion loan for Ukraine, advancing a financing plan intended to support the country’s budgetary and military needs through 2026 and 2027.
The agreement, reached in Brussels, follows a decision by EU leaders in December and now requires approval by the European Parliament before funds can be raised on global markets.
Officials said the loan is designed to prevent a projected shortfall in Ukraine’s public finances while the war with Russia continues and diplomatic efforts remain underway.
According to the agreed framework, approximately two thirds of the loan will be allocated to military-related expenditures, with the remaining third directed toward general budget support.
One third of the overall package will be used for standard government spending, while the rest will support defense procurement.
The loan will be backed by the EU’s seven-year budget, with member states covering annual interest costs estimated at about €3 billion.
Debate among EU governments focused on how strictly Ukraine’s defense purchases should be tied to European suppliers.
France supported prioritizing EU-based companies, while Germany, the Netherlands, and several Nordic countries argued for broader flexibility.
The final text allows Ukraine to purchase weapons from non-EU countries when equivalent equipment is unavailable within the bloc or when urgent operational needs apply.
Eligible categories include air and missile defense systems, fighter aircraft ammunition, and long-range strike capabilities.
Non-EU countries seeking broader participation, including the United Kingdom and South Korea, would be required to contribute financially toward interest payments in proportion to expected benefits for their defense industries.
Canada will be allowed to participate without additional payments under existing arrangements but must specify eligible products.
Repayment of the loan would only occur if Russia ends its invasion and pays reparations, with the EU otherwise considering the use of frozen Russian assets.
Despite the size of the package, EU and IMF estimates indicate Ukraine’s total financing needs will exceed available funding over the next two years.