BRUSSELS

The EU Council agreed Wednesday on the legal framework to provide Ukraine with a €90 billion ($106 billion) loan for 2026-2027, to support that country's budget and defense needs amid its war with Russia.

The package, agreed through enhanced cooperation with 24 EU member states, is designed to support Ukraine's general budget and defense requirements, according to a statement.

The EU Council aims for a swift agreement with the European Parliament to allow the first payment to be disbursed early in the second quarter of this year.

Under the framework, €30 billion will be provided as macroeconomic support through the EU's Ukraine Facility or macro-financial assistance programs, while €60 billion will target defense industrial capacities and military equipment procurement.

Funding will primarily be sourced from EU borrowing on capital markets and backed by the EU budget. Loan repayments will only become due once Russia has provided "war reparations" to Ukraine.

To ensure favorable loan terms and maintain debt sustainability, interest costs will be covered by the EU budget, with no additional burden on the Czech Republic, Hungary, or Slovakia, which opted out of the enhanced cooperation.

European Commission President Ursula von der Leyen welcomed the decision on the US social media platform X as “a powerful symbol of our ironclad solidarity with Ukraine as we approach four years since Russia’s full-scale invasion began."

She added that the support "will further strengthen Ukraine’s position on the battlefield -- and its hand at the negotiating table."

Ukraine’s funding needs for 2026-2027 are projected at €135.7 billion, according to IMF estimates, with the EU covering two-thirds and the remainder expected from other countries, notably G7 partners.

The EU and its member states have provided €193.3 billion in assistance to Ukraine since the start of the war in Ukraine in early 2020.​​​​​​​