European Union leaders agreed on Friday to raise 90 billion euros in joint borrowing to support Ukraine’s defence against Russia over the next two years, abandoning for now a contentious plan to fund Kyiv using frozen Russian state assets.
The decision, reached after hours of negotiations in Brussels, ensures continued financial backing for Ukraine at a moment when officials warned that a funding gap next year could weaken its ability to resist Moscow’s invasion.
Under the agreement, the European Commission will raise funds backed by the EU budget and provide the money to Ukraine as a loan. The move allowed leaders to bypass deep legal and political divisions over whether Russian sovereign assets immobilised in Europe could be used directly.
“We approved a decision to provide 90 billion euros to Ukraine,” European Council President Antonio Costa said at a press conference early Friday. He said the funding would be delivered urgently through borrowing supported by the EU budget.
The bloc has frozen about 210 billion euros in Russian central bank assets since the start of the war, most of them held in Belgium. While leaders reaffirmed that the assets will remain frozen until Russia pays reparations, they acknowledged that turning them into immediate financing proved too complex.
EU officials said concerns raised by Belgium played a central role in the shift. Brussels sought stronger legal and financial guarantees against possible retaliation from Moscow if the assets were released, according to diplomats familiar with the talks.
Belgian Prime Minister Bart De Wever said the proposal to base the loan on Russian assets raised too many unresolved questions.
“There were so many issues with the reparations loan that we had to move to a second option,” De Wever told reporters. He said the outcome preserved unity among member states and avoided internal disputes.
German Chancellor Friedrich Merz welcomed the agreement, describing it as a setback for Moscow.
“This is good news for Ukraine and bad news for Russia, and that was our intention,” he said.
The borrowing plan initially faced resistance from Hungary, whose prime minister Viktor Orban has taken a softer line on Russia. EU officials said Budapest agreed not to block the decision after receiving assurances that the scheme would not impose financial obligations on Hungary, Slovakia, or the Czech Republic.
An EU diplomat said the outcome allowed Orban to claim a political win by keeping the Russian assets untouched while still allowing the rest of the bloc to move forward.
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Several leaders warned that failure to act would have serious consequences. EU officials said Ukraine could face a severe cash shortage by the second quarter of next year without continued European support, raising fears of broader security risks for the continent.
“We cannot afford to fail,” EU foreign policy chief Kaja Kallas said as leaders arrived for the summit.
Ukrainian President Volodymyr Zelenskiy, who joined the talks, had urged the bloc to move ahead with using frozen Russian funds. While that option remains under discussion, EU leaders instructed the Commission to continue work on possible future mechanisms.
