Weather 
Published on •Updated
European Union countries have reached a deal to issue a €90 billion loan to meet Ukraine’s financial and military needs for 2026 and 2027, with Brussels aiming to make the first payment in early April to spare Kyiv from a sudden drop-off in foreign aid.
The agreement on the legal texts was struck by ambassadors on Wednesday afternoon after Cyprus, the holder of the Council’s rotating presidency, tabled a new version.
“Today’s agreement shows that the EU continues to act decisively in support of Ukraine and its people. The new financing will help ensure the country’s fierce resilience in the face of Russian aggression,” said Makis Keravnos, the Cypriot finance minister.
“At the same time, we are sending a strong signal that the sovereignty and territorial integrity of states must be fully respected, in accordance with international law.”
The €90 billion loan, agreed politically at a summit in Brussels, will be funded through the issuance of common debt, with the EU budget as a guarantee for investors.
As part of the deal, Hungary, Slovakia and the Czech Republic will be completely exempted from all financial obligations, including annual interest payments. The three countries had firmly opposed any additional assistance to Kyiv.
The European Commission estimates that the remaining 24 member states will have to pay between €2 billion and €3 billion every year to cover the associated costs.
The €90 billion figure will be split into two main pillars: €30 billion in budgetary aid, and €60 billion in military aid. The balance could be changed if the war comes to an end.
‘Made in Europe’
The procurement of weapons and ammunition was the last point of contention in the talks between EU ambassadors. France, a vocal advocate of “Made in Europe” policies, pushed to restrict purchases outside the continent as much as materially possible.
In the end, the loan will follow a so-called “cascading principle”: weapons and ammunition will be bought within Ukraine, the EU, Iceland, Liechtenstein, Norway and Switzerland. If the equipment is not available anywhere, Kyiv will be allowed to go to other markets, such as the United States, to obtain what it needs to fight.
Countries that have security and defence partnerships with the EU, such as the United Kingdom, Japan, South Korea and Canada, will also benefit from the priority of purchase if they pay a “fair and proportionate” contribution to the borrowing costs.
This coincides with a rapprochement between Brussels and London.
“It’s important to have the UK on board to participate,” said an EU official, speaking on condition of anonymity. “Both for the geopolitical situation, getting the UK closer is better for Europe. And it will make things more flexible for Ukraine.”
The €90 billion will be disbursed gradually over time and will be subject to strict conditions. For instance, any regression on anti-corruption efforts in Ukraine will trigger a suspension of aid.
Ukraine will only be asked to repay the €90 billion if Russia ceases its war of aggression and agrees to compensate Kyiv for the damages. Given that Moscow has flat-out ruled out the prospect of reparations, Brussels is expected to roll over the debt sine die.
The legal texts concluded on Wednesday still require the blessing from the European Parliament, which has committed to fast-tracking the procedure. The goal is to make the first payment in early April, a deadline suggested by Kyiv.
Shona Murray contributed reporting.
Read the full article here
