EU ambassadors approve 90 billion euro loan for Ukraine

18:50

By: Dakir Madiha

EU ambassadors approve 90 billion euro loan for Ukraine

EU ambassadors reached agreement Wednesday on the legal framework for a 90 billion euro loan to Ukraine. The deal, finalized in a closed-door Brussels meeting, clears a major hurdle for fund transfers starting in April.

This marks the bloc's largest single financial commitment to Ukraine since Russia's full-scale invasion in February 2022. About 60 billion euros will fund military aid, with 30 billion euros supporting general budget needs.

A key clause requires Ukraine to prioritize weapons and equipment purchases from EU member states or domestic producers. Non-European suppliers qualify only if European industry cannot deliver timely or adequately.

This provision represents Brussels' clearest bid yet to leverage wartime aid for boosting Europe's defense industrial base. The European Commission argues it serves dual aims: arming Ukraine while expanding production capacity amid growing calls for strategic autonomy.

The loan draws from joint EU market borrowing, backed by the bloc's budget "firepower" margin between maximum borrowing capacity and actual spending.

Three nations opted out, triggering "enhanced cooperation" procedures: Hungary, Slovakia and Czechia declined participation. This allows willing members to proceed without unanimity. The 24 participating states bear financial obligations, while holdouts face no risk or disbursement say.

The European Parliament endorsed enhanced cooperation January 21, with 499 votes in favor, 135 against and 24 abstentions.

Final parliamentary approval remains before the Commission can borrow and disburse. Diplomates express confidence in swift endorsement, enabling April payouts.

Ukraine faces no repayments until Russia pays war reparations. The EU reserves using 210 billion euros in frozen Russian central bank assets held bloc-wide for recovery if Moscow fails to compensate Kyiv.

European Commission President Ursula von der Leyen stated in January: "We all want peace for Ukraine. For that, Ukraine must stand strong on the battlefield and at the negotiating table."