Published by Global Banking and Finance Review
Posted on December 18, 2025
4 min readLast updated: January 20, 2026
EU leaders decide on a €90 billion loan to Ukraine, avoiding the use of frozen Russian assets due to political complexities and resistance from Belgium.
By Lili Bayer, Andrew Gray and Andreas Rinke
BRUSSELS, Dec 18 (Reuters) - European Union leaders decided on Friday to borrow cash to loan 90 billion euros ($105 billion) to Ukraine to fund its defence against Russia for the next two years rather than use frozen Russian assets, sidestepping divisions over an unprecedented plan to finance Kyiv with Russian sovereign cash.
The leaders also gave the European Commission a mandate to keep working on a so-called reparations loan based on Russian immobilised assets but that option proved unworkable for now, above all due to resistance from Belgium, where the bulk of the assets is held.
"Today we approved a decision to provide 90 billion euros to Ukraine," EU summit chairman Antonio Costa told a press conference early on Friday morning after hours of talks among the leaders in Brussels. "As a matter of urgency, we will provide a loan backed by the European Union budget."
USE OF RUSSIAN ASSETS TOO COMPLEX AT THIS STAGE
The idea of EU borrowing initially seemed unworkable as it requires unanimity and Hungary's Russia-friendly Prime Minister Viktor Orban had opposed it. But Hungary, Slovakia and the Czech Republic agreed to let the scheme go ahead as long as it did not impact them financially.
The EU leaders said Russian assets, totalling 210 billion euros in the EU, will remain frozen until Moscow pays war reparations to Ukraine. If Moscow ever takes such a step, Ukraine could then use the money to pay back the loan.
"This is good news for Ukraine and bad news for Russia and this was our intention," German Chancellor Friedrich Merz said.
The stakes for finding money for Kyiv were high because without the EU's financial help, Ukraine would run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring closer the threat of Russian aggression against the bloc.
The decision follows hours of discussions among leaders on the technical details of an unprecedented loan based on the frozen Russian assets, which turned out to be too complex or politically demanding to resolve at this stage.
The main difficulty was providing Belgium, where 185 billion euros of the total Russian assets in Europe are held, with sufficient guarantees against financial and legal risks from potential Russian retaliation for the release of the money to Ukraine.
"There were so many questions on the Reparations Loan, we had to go to Plan B. Rationality has prevailed," Belgian Prime Minister Bart De Wever told a news conference. "The EU has avoided chaos and division and remained united," he said.
HUNGARY SCORES A WIN
With public finances across the EU already strained by high debt levels, the European Commission had proposed using the Russian assets for a loan to Kyiv or joint borrowing against the EU budget.
Using the latter option allowed Orban to claim a diplomatic victory.
"Orban got what he wanted: no reparation loan. And EU action without participation of Hungary, Czech Republic and Slovakia," one EU diplomat said.
'CAN'T AFFORD TO FAIL'
Several EU leaders arriving at the summit said it was imperative they find a solution to keep Ukraine financed and fighting for the next two years. They were also keen to show European countries' strength and resolve after U.S. President Donald Trump last week called them "weak".
"We just can't afford to fail," EU foreign policy chief Kaja Kallas said.
Ukrainian President Volodymyr Zelenskiy, who took part in the summit, urged the bloc to agree to use the Russian assets to provide the funds he said would allow Ukraine to keep fighting.
"The decision now on the table – the decision to fully use Russian assets to defend against Russian aggression – is one of the clearest and most morally justified decisions that could ever be made," he said.
($1 = 0.8534 euros)
(Writing by Jan Strupczewski and Ingrid Melander; Additional reporting by Jan Strupczewski, Yuliia Dysa, Inti Landauro, Olena Harmash, Julia Payne, John Irish, Bart Meijer, Benoit Van Overstraeten, Andreas Rinke, Alan Charlish, Krisztina Than; Editing by Richard Lough, Alex Richardson, Mark Potter and Nick Zieminski)
A loan is a sum of money that is borrowed and expected to be paid back with interest over a specified period.
Frozen assets are funds that are restricted from being accessed or used, often due to legal or regulatory actions.
War reparations are payments made by a country to compensate for damages caused during a conflict, often as a result of a peace treaty.
The European Union budget is the financial plan that outlines the expected revenues and expenditures of the EU for a specific period, funding various programs and initiatives.
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