The Council of the European Union has agreed on the legal framework to implement a €90 billion support loan for Ukraine for 2026–2027, aiming to address the country’s urgent financing needs as the war with Russia continues. The Council is seeking a swift agreement with the European Parliament to enable the first disbursement early in the second quarter of 2026. The loan will primarily support Ukraine’s general budget and defence requirements while signaling the EU’s commitment to uphold sovereignty and international law.
The financing will be raised through EU borrowing on capital markets and backed by the EU budget, with repayment only required once Russia provides war reparations to Ukraine. The funds will also strengthen both European and Ukrainian defence industries. The decision was taken under the enhanced cooperation procedure, involving 24 member states.
Under the framework, €30 billion will be provided as macroeconomic support through macro-financial assistance or the dedicated Ukraine Facility, ensuring stable and predictable funding. The remaining €60 billion will support Ukraine’s investment in defence industrial capacities and procurement of military equipment, giving timely access to defence products from Ukraine and EU industries. Funding will be released based on Ukraine’s financing strategy, which requires Council approval after a Commission assessment and will be conditional on compliance with the rule of law and anti-corruption measures.
Defence procurement will primarily be sourced from companies within the EU, Ukraine, or EEA-EFTA countries. In urgent cases where necessary defence products are unavailable in these regions, targeted exceptions will allow procurement from third countries that either have a SAFE bilateral agreement with the EU or are security and defence partners contributing financially and militarily to Ukraine.
To maintain favourable loan terms and safeguard Ukraine’s debt sustainability, the EU budget will cover interest costs. This arrangement does not affect the contributions of Czechia, Hungary, or Slovakia, which are not participating in the enhanced cooperation. The next steps include finalizing legal texts with the European Parliament and amending the Multiannual Financial Framework regulation to guarantee the support under the EU budget, allowing the Commission to release the first payments in early Q2 2026.
According to IMF projections, Ukraine’s remaining funding needs for 2026–2027 are estimated at €135.7 billion, assuming the war ends in 2026. The EU’s €90 billion loan will cover roughly two-thirds of this requirement, focusing on macro-financial support and investment in defence capabilities, with remaining needs expected to be met by G7 partners. Since the beginning of Russia’s military aggression, the EU and its member states have provided €193.3 billion in assistance, with ongoing commitments across political, financial, economic, humanitarian, military, and diplomatic areas.
