On 19 December 2025 European leaders agreed a €90 billion loan to Ukraine for 2026 and 2027, financed by joint debt, after failing to agree on using frozen Russian assets.
EU heads of state and government agreed in the early hours of 19 December 2025 in Brussels to grant Ukraine an interest-free loan of €90 billion to cover much of its budgetary and military needs for 2026 and 2027. The European Commission will finance it by issuing debt on the markets, backed by the EU budget.
What we know
The Commission had proposed a reparations loan financed with the Russian central bank’s assets immobilised in Europe, most of them at the Belgian institution Euroclear. Belgium, fearing retaliation from Moscow and being left alone to repay them, blocked that route. As an alternative, leaders opted for joint debt, with twenty-four countries taking part: Hungary, Slovakia and the Czech Republic stayed out.
The Russian assets, some €210 billion in the Union, will stay frozen until Russia pays reparations to Ukraine, and the Union reserves the right to use them to repay the loan if Moscow does not.
Why it matters
The agreement secured Ukraine’s financing at a time when US support was uncertain and peace talks were stalled. It was also another step in the use of joint European debt, after the pandemic’s Next Generation EU funds and the 2025 defence loan programme, strengthening the Union’s role as an issuer on the markets.
What to bear in mind
For investors, debt issued by the European Union is a high-quality asset gaining volume and liquidity, and its spread over German debt is closely watched. For businesses, Ukraine’s financing supports its economy and its future reconstruction. Ask your adviser how this applies to you.
Europe borrows together again when urgency outweighs its differences.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
