EU to provide Ukraine with massive zero-interest loan

EUROPEAN Union leaders agreed yesterday to provide a massive interest-free loan to Ukraine to meet its military and economic needs for the next two years, but they failed to bridge differences with Belgium that would have allowed them to use frozen Russian assets to raise the funds.

- LORNE COOK AND ANGELA CHARLTON Associated Press

After almost four years of war, the International Monetary Fund estimates that Ukraine will need €137bn (£120.7bn) in 2026 and 2027. The government in Kyiv is on the verge of bankruptcy, and desperately needs the money by spring.

The plan had been to use some of the €210bn (£180.5bn) worth of Russian assets that are frozen in Europe, mostly in Belgium.

The leaders worked deep into Thursday night to reassure Belgium that they would protect it from any Russian retaliation if it backed the “reparations loan” plan but in the end the leaders did not use that option, but as the talks bogged down the leaders eventually opted to borrow the money on capital markets.

“We have a deal. Decision to provide €90bn of support to Ukraine for 2026-27 approved. We committed, we delivered,” EU Council President Antonio Costa said in a post on social media.