EU Details Massive Financial Lifeline for Ukraine
The European Union has confirmed that most of its major loan package for Ukraine will be spent on military needs. The European Commission shared details on Wednesday during a press conference in Brussels. Officials said the funding is critical as the war with Russia continues into its fifth year.
According to the Commission, two-thirds of the €90 billion loan will support Ukraine’s military apparatus. This equals roughly $105 billion of the total facility. The remaining funds will be used for general budget support and essential state functions.
The loan was agreed by EU member states in December. The decision followed months of difficult diplomatic negotiations. The package is designed to help Ukraine remain financially stable during the prolonged conflict.
European Commission President Ursula von der Leyen said the support serves two clear purposes. One is to strengthen Ukraine’s defence on the battlefield. The other is to ensure the Ukrainian state continues to function.
She said the funding would help keep basic public services running. These include salaries, pensions, and social spending. Without such aid, Ukraine’s economy would face severe strain.
Military Focus and European Defence Industry Boost
Von der Leyen stressed that defence spending will be a priority. Most of the military funds will be used to purchase weapons and equipment. The purchases will mainly come from Ukraine and European countries.
She said this approach benefits both sides. Ukraine gets faster access to weapons. Europe strengthens its own defence industry. Several EU countries, including France, have long supported this strategy.
European leaders believe local procurement reduces reliance on the United States. It also encourages job creation within the EU. Research and development in defence technology are expected to grow.
Von der Leyen said these investments must deliver long-term returns. She highlighted the importance of creating jobs and supporting innovation. The defence sector, she said, should become more resilient and competitive.
However, the Commission acknowledged some flexibility. If certain equipment is not available in Europe, Ukraine may look elsewhere. In such cases, Kyiv will be allowed to purchase arms outside the continent.
This clause is meant to avoid delays on the battlefield. Officials said Ukraine’s immediate defence needs remain the top concern.
Approval Process, Repayment Terms, and Next Steps
The loan still requires formal approval. The European Parliament and EU member states must sign off. Once approved, payments can begin.
The Commission said it is pushing for speed. Brussels aims to deliver the first disbursement in April. This would provide Ukraine with early financial relief.
The loan will cover about two-thirds of Ukraine’s funding needs over the next two years. EU leaders see it as a bridge until longer-term solutions emerge.
Initially, the EU explored using frozen Russian central bank assets. That plan failed to gain full legal and political backing. Instead, leaders agreed on a loan backed by the EU’s common budget.
Under the agreement, Ukraine will not repay the loan immediately. Brussels said repayment would only begin once Russia pays for war damages. This position reflects EU political support for Kyiv.
The EU will also cover interest costs. These are expected to reach around €3 billion per year. The interest will be paid through the EU budget.
Russia has strongly criticised the loan. Moscow called it a major blow to the European Union. Ukrainian President Volodymyr Zelensky welcomed the decision. He said it would significantly boost Ukraine’s defence.
As the war drags on, the loan marks one of the EU’s strongest financial commitments yet. It signals long-term backing for Ukraine’s military and state stability.
