The European Union has agreed to provide Ukraine with €90 billion ($105.5 billion) for the years 2026 and 2027, European Council President António Costa has said.
"We have a deal," Costa said in a post on social media platform X in the early hours of Friday. "Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved. We committed, we delivered."
EU leaders gathered in Brussels reached a compromise after plans to use billions of euros in frozen Russian state assets to cover Ukraine's financing needs of the coming years failed to gain the necessary backing.
Ukraine will only have to repay the new loan once Russia has paid reparations, said German Chancellor Friedrich Merz after the meeting.
Should Moscow fail to provide reparations, the frozen Russian assets will be used to repay the loan, Merz said.
Ukrainian President Volodymyr Zelensky has urged EU leaders to find a swift solution for Kiev's financial needs.
Without new funding, Ukraine was at risk of running a deficit of €45 billion-€50 billion next year and of having to scale back its military production, he said after an exchange with EU leaders.
"These funds are sufficient to cover military and budgetary needs of Ukraine for the next two years," said Merz.
"This is a decisive message for an end to the war because [Russian President Vladimir] Putin will only make concessions once he realizes his war will not pay off."
Providing Kiev with a so-called reparations loan worth billions of euros in frozen Russian state assets had been the most intensely debated funding option in recent weeks.
The European Commission proposed to provide Ukraine with up to €210 billion in immobilized Russian assets in the EU as a reparations loan, of which €90 billion was meant to cover financial and military needs in 2026 and 2027.
Merz has been a vocal supporter of the reparations loan, saying the EU "must use Russian assets" to finance Ukraine, as he arrived at the EU summit on Thursday morning.
Belgium, where the lion's share of the assets are held and roughly €185 billion are held by Brussels-based firm Euroclear had vehemently opposed the plan, citing legal and financial risks.
The Belgian government feared that Moscow could retaliate against private European citizens and companies, for example through expropriations in Russia, and has been calling for safeguards.
Belgian Prime Minister Bart De Wever had been demanding legally binding and unconditional guarantees from other EU countries covering the entire sum of the loan as well as protection against any potential claims for damages.
On Wednesday, Italian Prime Minister Giorgia Meloni also warned of potential legal hurdles to the plans. Finding a way to use the Russian state assets that is legally sound is "anything but easy."
