The decision was taken after leaders agreed to raise funds from capital markets rather than rely on frozen Russian assets, diplomats told Reuters. Costa announced the agreement on social media, saying the package for 2026 and 2027 had been approved after intense overnight negotiations.
A draft of the summit conclusions, seen by Reuters, said the borrowing would be secured against the EU budget. This effectively sidelines a controversial proposal to immediately use frozen Russian assets to finance Ukraine’s war effort, although discussions on that option will continue with EU governments and the European Parliament.
Under the agreed framework, Ukraine will only begin repaying the joint EU loan once it receives war reparations from Russia. Until then, Russian assets frozen in Europe will remain immobilised, with the EU reserving the right to use them to repay the loan if needed.
The agreement will not impose financial obligations on Hungary, Slovakia or Czech Republic, which had opposed contributing to Ukraine’s financing, according to the draft text.
Diplomats said the main obstacle to using Russian assets directly was the legal and financial risk faced by Belgium, where the bulk of the frozen funds are held. Moscow has warned it would pursue legal action and seize foreign assets in retaliation if its reserves were used.
An EU diplomat quoted by Reuters said the deal was positive as it secures funding certainty for Ukraine for the next two years, even as disagreements persist over the longer term use of frozen Russian assets.
