The European Commission has officially presented a legal proposal for the allocation of 90 billion euros in loan assistance to Ukraine for the years 2026–2027. According to this document, the multi-billion euro aid package approved by EU leaders at the end of December will be structured into two main parts: 30 billion euros will be directed towards budget support, while 60 billion euros will be aimed at strengthening the country’s military capabilities.
This is reported by Finway
Priorities for Military Assistance
As stated by European Commission President Ursula von der Leyen, the majority of the funds allocated for defense are intended for the procurement of military equipment, primarily from Ukraine, EU member states, and EEA/EFTA countries that are part of the single European market. If the necessary equipment cannot be procured from these regions or delivered on time, purchases outside the EU are permitted.
“The funds will be used to procure equipment primarily in Ukraine, in the EU, and in EEA/EFTA countries (the area where EU single market rules apply – ed.). However, if these necessary purchases are not possible in this region or in a timely manner, it may also sometimes be possible to procure equipment outside the EU and the geographical region I just described,” said European Commission President Ursula von der Leyen while presenting the proposal.
This decision was the result of a compromise among EU countries. France and its allies insisted on prioritizing purchases within Europe to stimulate the development of the European defense industry. At the same time, several other countries, including the Netherlands, advocated for greater flexibility and the ability to purchase weapons and equipment, including American-made products, under the PURL initiative.
Budget Support and Loan Repayment Issues
30 billion euros from this package are designated for financing reforms and modernization in Ukraine as part of its further integration into the European Union. Ursula von der Leyen emphasized that Ukraine will not have to repay the funds received until the Russian Federation compensates for the damages caused. To this end, Russian assets in the EU will remain frozen.
European Commissioner for Enlargement Olivér Várhelyi noted that the budget support provided will be guaranteed in the form of a loan, which is planned to be repaid through reparations received by Ukraine from Russia. European Commissioner for Economy Valdis Dombrovskis expressed confidence that the allocated 60 billion euros for defense will not only allow Ukraine to acquire the necessary equipment for protection but will also significantly strengthen the defense industry of both Ukraine and Europe.
Ultimately, the European Parliament must approve the European Commission’s proposals. It is expected that the first tranches of aid will reach Ukraine as early as April 2026, considering the urgency and relevance of the country’s needs.
It should be noted that earlier, among EU member states, the idea of a so-called reparations loan was discussed, which would involve financing Ukraine up to 90 billion euros from the income and reserves of frozen Russian assets in Europe. The total value of these assets is estimated at approximately 210 billion euros. Russia categorically denies the possibility of confiscating its funds, calling it “theft.”