Brussels finds a compromise mechanism to support Kyiv
The European Union has agreed to provide Ukraine with a €90bn loan to be raised on capital markets and secured against the bloc’s shared budget. The decision came after EU member states failed to reach consensus on using frozen Russian sovereign assets to finance Kyiv directly.
According to the Financial Times, the agreement represents a forced but critically important financial measure. It allowed the EU to avoid a political deadlock and to secure funding for Ukraine for the next two years, amid growing concerns that without additional support the country could face a financial crisis as early as 2026.
Why the Russian asset plan failed
At the centre of the dispute were around €210bn in Russian assets, most of which are frozen in Belgium. EU leaders had explored a scheme in which these funds would be used as collateral for a so-called “reparations loan” to Ukraine.
Belgium, however, insisted on unlimited guarantees from other EU countries to cover potential legal challenges or retaliatory measures by Russia. According to officials familiar with the discussions, these demands were viewed as excessive, ultimately leading to the collapse of the original proposal.
As a result, EU leaders were forced to search for an alternative financing mechanism that did not rely directly on Russian assets.
Marathon talks and a late-night compromise
After more than 16 hours of intensive negotiations, EU leaders agreed on a new approach: borrowing €90bn on capital markets, backed by unused spending capacity within the EU’s common budget. The funds are intended to cover Ukraine’s key financial needs over the next two years.
“We committed — and we delivered,” said European Council President António Costa after the summit.
French President Emmanuel Macron warned that failing to reach an agreement would have been “a disaster,” stressing that the EU could not afford to leave the Brussels summit without a concrete financial plan for Kyiv.
Repayment conditions and Russia’s role
Under the agreed terms, Ukraine will only be required to repay the loan if Russia pays reparations. Russian assets will remain frozen and could ultimately be used to cover the debt should Moscow refuse to provide compensation.
German Chancellor Friedrich Merz described the outcome as “a practical and effective solution,” acknowledging that the earlier proposal involving Russian assets had proved too complex to implement.
“We always said the priority was getting the money to Ukraine, not arguing about the method,” said one EU official involved in the negotiations.
Political consequences inside the EU
The abandonment of the reparations loan model represents a political setback for European Commission President Ursula von der Leyen and the German chancellor, both of whom had strongly supported the use of Russian assets. By contrast, Belgian Prime Minister Bart De Wever argued that the compromise had spared Europe from internal division.
“Europe has won, and financial stability has certainly won,” he said.
Who pays — and who stays out
The agreement also stipulates that the Czech Republic, Hungary and Slovakia will not bear any direct financial obligations under the loan. These countries had previously opposed using EU funds to support Ukraine.
Nevertheless, one senior European official warned that political consequences would still follow:
“They don’t have to pay — but politically, they will pay for it.”
Kyiv’s response and the broader context
Ukraine’s first deputy foreign minister, Sergiy Kyslytsya, welcomed the deal, saying it provides Kyiv with resources needed “to protect itself and Europe as a whole.” He described the outcome as an example of pragmatism prevailing over ideal but unworkable solutions.
In the assessment of the Financial Times, the €90bn loan underscores the EU’s determination to preserve an independent political role in discussions over a future peace settlement and to reaffirm Europe’s responsibility for Ukraine’s long-term financial support.
This article was prepared based on materials published by The Financial Times. The author does not claim authorship of the original text but presents their interpretation of the content for informational purposes.
The original article can be found at the following link: The Financial Times.
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