EUROPEAN leaders have agreed to provide a loan of £76billion to help Ukraine fight after failing unlock £160billion worth of frozen Russian assets.
The loan will keep Ukraine financially afloat and in the fight against Russia’s invasion for the next two years – but it came at the EU’s own expense rather than Moscow’s frozen assets.
After almost four years of war, the International Monetary Fund (IMF) estimates that Ukraine will need £120billion over the next two years.
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 £160billion worth of Russian assets that are frozen in Europe, mostly in Belgium.
But Russian President Vladimir Putin threatened retaliation if the decision to use Moscow’s assets was passed.
Kirill Dmitriev, Putin’s special envoy for investment and economic cooperation, hailed the decision and said that “law and sanity” won.
Dmitriev wrote on X: “Major BLOW to EU warmongers led by failed Ursula voices of reason in the EU BLOCKED the ILLEGAL use of Russian reserves to fund Ukraine.”
President Donald Trump has cut US.-funded military aid to Ukraine and recently dismissed European leaders as weak.
Volodymyr Zelenskiy warned the leaders in person that if they did not deliver, Ukraine would run short of funds within months, hampering its war effort.
EU leaders worked deep into Thursday night to reassure Brussels that they would protect it from any Russian retaliation if it backed the reparations loan plan.
But the reparations loan proposal faced strong resistance from Belgium, home to the bulk of the £180billion of Russian assets in the EU.
The plan got bogged down as Belgian Prime Minister Bart De Wever rejected the scheme as legally risky – and warned that it could harm their financial institutions.
Belgian bankers have been subjected to an intimidation campaign by Russia’s GRU military intelligence agency, according to intelligence agencies.
After leaders in Europe failed to persuade Belgium, a decision was made to borrow the money on the capital markets.
EU Council President Antnio Costa said: “We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved.
But not all countries agreed to the loan package.
Hungary, Slovakia and the Czech Republic refused to support Ukraine and opposed it, but a deal was reached in which they did not block the package and were promised protection from any financial fallout.
Hungarian Prime Minister Viktor Orbán, who is Vladimir Putin’s closest ally in Europe, said: “I would not like a European Union in war.
“To give money means war,” said Orban.
He also described the rejected plan to use the frozen Russian assets as a dead end.
French President Emmanuel Macron said the deal was a major advance, saying that borrowing on capital markets was the most realistic and practical way to fund Ukraine and its war efforts.
German Chancellor Friedrich Merz also hailed the decision.
Belgium was rattled last Friday when Russia’s Central Bank launched a lawsuit against Euroclear to prevent any loan being provided to Ukraine using its money.
The money is frozen under EU sanctions slapped on Moscow after it launched its full-scale war in 2022.
De Wever said: “For me, the reparations loan was not a good idea.
“There are a lot of loose ends. And if you start pulling at the loose ends in the strings, the thing collapses.
“We avoided stepping into a precedent that risks undermining legal certainty worldwide.”