The European Union has formally approved a crucial 90 billion-euro loan package for Ukraine, providing a vital lifeline to sustain its wartime efforts. The funds will help keep the Ukrainian government and military operational.
This financial aid arrives as Ukraine faces a significant financing gap, estimated by the International Monetary Fund to be around 136 billion euros over the next two years. The EU loan is expected to cover approximately two-thirds of these needs for 2026 and 2027. Without this support, officials warned Kyiv could have exhausted resources for basic state functions and its war effort as early as this spring.
The loan's release was delayed for months due to political disputes within the EU, particularly concerning the Druzhba oil pipeline. The impasse was resolved after Ukraine confirmed repairs to the pipeline, which supplies oil to Slovakia and Hungary, removing the final obstacle to the loan's approval.
Under the agreement, Ukraine will receive 45 billion euros for the remainder of this year and 45 billion euros for 2027. Approximately one-third of the funds will support the government's budget, with the remainder allocated to defense, including weapons procurement and domestic arms production.
Interestingly, EU leaders have stipulated that Ukraine will begin repaying the loan only after Russia provides war reparations. The EU opted for a cautious approach, borrowing the money on international markets to lend to Ukraine, rather than immediately utilizing Russia's frozen assets, citing concerns over potential retaliation and legal challenges.