BRUSSELS: EU leaders struck a deal Friday to provide Ukraine a 90-billion-euro loan to plug its looming budget shortfalls -- but failed to agree on using frozen Russian assets to come up with the funds.
The agreement -- which came after more than a day of talks at a summit in Brussels -- offers Kyiv a desperately needed lifeline as US President Donald Trump pushes for a quick deal to end Russia's war.
"We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved," EU chief Antonio Costa wrote on X. "We committed, we delivered."
After scrambling around for a solution, EU leaders settled on coming up with a loan backed by the bloc's common budget.
French President Emmanuel Macron described the deal agreed as a major advance, saying this option “was the most realistic and practical way” to fund Ukraine and its war efforts. He added that the deal included a mechanism to protect three countries, Hungary, Slovakia and the Czech Republic from any financial fallout.
German Chancellor Friedrich Merz also hailed the decision, which came after EU leaders worked deep into Thursday night to reassure Belgium that they would provide guarantees to protect it from Russian retaliation if it backed the loan for Ukraine.
“The financial package for Ukraine has been finalized,” Merz said in a statement, noting that “Ukraine is granted a zero-interest loan."
“These funds are sufficient to cover the military and budgetary needs of Ukraine for the two years to come,” Merz added.
He said the frozen assets will remain blocked until Russia has paid war reparations to Ukraine. Ukrainian President Volodymyr Zelenskyy has said that would cost over 600 billion euros ($700 billion).
“If Russia does not pay reparations we will — in full accordance with international law — make use of Russian immobilized assets for paying back the loan,” Merz said.
The number one option on the table had been to tap some 200 billion euros of Russian central bank assets frozen in the EU to generate a loan for Kyiv.
But that scheme fell by the wayside after Belgium, where the vast bulk of the assets are held, demanded guarantees on sharing liability that proved too much for other countries.
It's moral
The EU estimates Ukraine needs an extra 135 billion euros ($159 billion) to stay afloat over the next two years, with the cash crunch set to start in April.
Ukraine's President Volodymyr Zelensky had told EU leaders at the start of the summit on Thursday that using Russian assets was the right way to go.
"Russian assets must be used to defend against Russian aggression and rebuild what was destroyed by Russian attacks. It's moral. It's fair. It's legal," Zelensky said.
While Kyiv may be left disappointed that the EU did not take the leap to use the Russian assets -- securing financing another way will still be a relief.
Zelensky told the leaders that Kyiv needed a decision by the end of the year, and that putting his country on a firmer financial footing could give it more leverage in talks to end the war.
Ukraine, US talks
Bubbling close to the surface of the EU's discussion are the US efforts to forge a deal to end the war.
Zelensky announced Ukrainian and US delegations would hold new talks on Friday and Saturday in the United States.
He said he wanted Washington to give more details on the guarantees it could offer to protect Ukraine from another invasion.
"What will the United States of America do if Russia comes again with aggression?" he asked. "What will these security guarantees do? How will they work?"
Trump nonetheless kept the pressure on Kyiv, saying again he hopes Ukraine "moves quickly" to agree a deal.
