€90 Billion Boost for Ukraine

In a decisive move, the European Parliament has approved a substantial €90 billion loan to support Ukraine amidst its ongoing conflict with Russia. This financial boost aims to address Ukraine’s immediate funding requirements as the war enters its fifth year. The loan package includes €60 billion designated for enhancing Ukraine’s defense capabilities and an additional €30 billion for macro-financial assistance and budget support.

The approved funds are intended to ensure Ukraine’s access to essential military equipment and strengthen its defense industries, primarily sourcing from Ukraine, the EU, and the EEA/EFTA regions. However, the agreement includes provisions for acquiring defense materials from other countries under urgent circumstances. The financial aid aligns with a detailed financing strategy crafted by Ukraine and evaluated by the European Commission, which also necessitates Council approval.

Strict conditions are tied to the disbursement of these funds, emphasizing Ukraine’s commitment to democracy, the rule of law, and human rights. This includes ongoing efforts to combat corruption and fortify democratic institutions. The support loans will be financed through collective EU borrowing on the capital markets, safeguarded by the EU long-term budget’s “headroom”. The repayment of the loan principal by Ukraine is contingent upon receiving war reparations from Russia.

This legislative package was expedited through the Parliament’s urgent procedure to facilitate the prompt provision of aid. The proposals received robust support, although some EU member states opted out of the backing under the enhanced cooperation procedure. The next steps involve formal adoption by the Council to enable the disbursement of the initial payment in early 2026.