EU Greenlights €90 Billion in Additional Ukraine Funding for 2026-27

The European Union has endorsed a €90 billion ($105.5 billion) financial package for Ukraine covering the 2026–2027 period, EU Council President Antonio Costa announced on Friday. The decision, taken at a meeting of EU heads of state and government, extends the bloc’s long-term economic support for Kyiv and establishes a framework that links Ukraine’s eventual repayment to the payment of war reparations by Russia.

Under the agreement, funds will be raised through collective borrowing backed by the EU budget rather than by tapping frozen Russian assets. Member states had considered repurposing approximately €210 billion in immobilized Russian holdings—most of it located in Belgium—to finance a “reparations loan.” Concerns over legal exposure and potential litigation, voiced in particular by Belgian Prime Minister Bart De Wever, led the bloc to select joint borrowing as the immediate funding mechanism. The assets will remain frozen, but will not be used directly at this stage to underwrite the new tranche of aid.

Ukrainian President Volodymyr Zelenskyy welcomed the decision, describing the multi-year commitment as a crucial financial safeguard. Earlier in the week, he had urged European leaders to expand assistance and clarify plans for using Russian assets, arguing that predictable support would help sustain Ukraine’s government operations and deter further Russian advances.

According to Costa, Ukraine is not expected to service the loan until Russia pays reparations for the damage caused by its invasion. By tying repayment to future compensation, the EU seeks to shield Kyiv’s public finances while signaling to Moscow that asset seizures could be extended if the conflict continues. Officials also emphasized that the package does not alter the bloc’s position that a cease-fire and a negotiated settlement remain the preferred route to ending hostilities.

The newly approved funding supplements several existing EU instruments. Through the Ukraine Facility and related programs, Brussels has already disbursed roughly €6 billion in bridge financing to help Kyiv cover immediate budget gaps. In addition, Ukraine has received €18.1 billion in loans this year under a Group of Seven scheme designed to stabilize its economy. Cumulatively, EU assistance to Ukraine since Russia’s full-scale invasion in February 2022 has surpassed €187 billion, encompassing military, humanitarian and macro-financial support.

The arrangement also highlights the bloc’s intention to play a larger role in diplomatic efforts aimed at ending the war. European officials have been coordinating with the United States and other partners on a prospective peace framework. In late November, U.S. and Ukrainian negotiators met in Geneva to refine a proposal that would freeze current front-line positions and address security guarantees, territorial control and Ukraine’s long-term relationship with NATO—issues that remain contentious in Kyiv.

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While Washington leads many of the security discussions, EU leaders believe that sustained financial backing enhances their leverage in shaping any eventual settlement. The new loan package is therefore viewed in Brussels as both an economic lifeline for Ukraine and a strategic tool for European diplomacy. A background note from the European Council underscores that future disbursements will be conditioned on governance and anti-corruption benchmarks, reflecting the bloc’s standard funding safeguards.

Public sentiment across Europe remains largely supportive of Ukraine, though some governments face domestic pressure to limit budgetary exposure amid inflation and slowing growth. The collective borrowing model seeks to balance those concerns by spreading the fiscal burden across all 27 member states. EU officials did not specify when bond issuance will begin but indicated that disbursements are expected to start early in the 2026 budget cycle, pending ratification by national parliaments where required.

Since the outset of the conflict, Kyiv has depended heavily on international aid to finance defense spending, social services and infrastructure repairs. The new EU commitment aims to assure Ukrainian policymakers that core government functions can be maintained even if the war extends into a fourth or fifth year. Whether additional Western funding will be necessary beyond 2027 is likely to hinge on the trajectory of both battlefield developments and peace negotiations.

Crédito da imagem: Amaury Cornu / AFP via Getty Images