August M
European Union leaders have agreed on a new financial approach to keep Ukraine’s war effort funded, choosing a politically safer route after intense overnight negotiations in Brussels. The decision reflects both urgency on the battlefield and divisions within the bloc over how far to go in using Russian money.
While the outcome avoided a major internal clash, it stopped short of the most radical option on the table.
According to Reuters, EU leaders decided on Friday to borrow money backed by the EU budget to support Ukraine’s defence for the next two years, instead of directly using frozen Russian sovereign assets.
“Today we approved a decision to provide 90 billion euros to Ukraine,” EU summit chairman Antonio Costa told reporters after the talks. He said the funds would be provided urgently through an EU-backed loan.
Russian assets frozen
Leaders also gave the European Commission a mandate to continue work on a so-called reparations loan based on Russian immobilised assets. However, that option was deemed unworkable for now, largely because of opposition from Belgium, where most of the assets are held.
The EU said Russian assets in the bloc, totalling about 210 billion euros, will remain frozen until Moscow pays war reparations to Ukraine. If that were to happen, Ukraine could use the funds to repay the loan.
“This is good news for Ukraine and bad news for Russia and this was our intention,” German Chancellor Friedrich Merz said.
Political hurdles
The borrowing plan itself had appeared uncertain, as it required unanimous support and Hungary’s Prime Minister Viktor Orban had opposed it. In the end, Hungary, Slovakia and the Czech Republic agreed not to block the scheme, provided it had no financial impact on them.
Using EU-backed borrowing allowed Orbán to claim a diplomatic win. One EU diplomat told Reuters that Hungary achieved its goal of avoiding a reparations-based loan while allowing the rest of the bloc to move forward, reports Reuters.
Can’t afford failure
Several leaders stressed the importance of unity and resolve, particularly after U.S. President Donald Trump recently described Europe as “weak.”
“We just can’t afford to fail,” EU foreign policy chief Kaja Kallas said.
Ukrainian President Volodymyr Zelenskiy, who attended the summit, again urged leaders to fully use Russian assets to fund Ukraine’s defence.
“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, notes Reuters.
Sources: Reuters
