The European Parliament has voted to grant Ukraine a loan of €90 billion, intended for the period of 2026-2027. This decision was made in light of the ongoing armed aggression by the Russian Federation against Ukraine.
This is reported by Finway
Funding Structure and Allocation of Funds
According to the decision, out of the total amount, €30 billion will be allocated for macro-financial assistance and budget support for Ukraine. The remaining €60 billion is designated for strengthening the country’s defense capabilities, including the procurement of military equipment. Weapons and defense products are planned to be purchased primarily from manufacturers in Ukraine, EU member states, the European Economic Area, and the European Free Trade Association. Purchases from other countries will only be allowed in cases of urgent need.
Funding Mechanism and Repayment Conditions
The loan will be financed through joint borrowing by the EU on international financial markets, with guarantees provided from the long-term budget reserve of the European Union. The costs of servicing this debt will be covered by the annual budgets of the EU: according to preliminary estimates by the European Commission, these costs will amount to about €1 billion in 2027, and from 2028 onwards, approximately €3 billion per year. Ukraine commits to repaying the principal amount of the loan only after receiving reparations from Russia.
“Ukraine will be obliged to repay the principal amount of the loan after receiving reparations from Russia for the war.”
It is expected that after the official approval of the decision by the EU Council, the first tranche will be transferred to Ukraine at the beginning of the second quarter of 2026.
The mechanism was agreed upon by EU member states over several months. Ultimately, three countries—Hungary, Slovakia, and the Czech Republic—refused to participate in the financing, while the remaining 24 countries supported the allocation of funds. France insisted that the procurement of defense products be carried out primarily within the EU and Ukraine, which is reflected in the final decision.