EU agrees on $105bn loan to support Ukraine’s defence against Russia

European Union leaders have agreed to provide an interest-free loan to Ukraine to meet its military and economic needs for the next two years, EU Council President Antonio Costa has said.

The leaders decided early on Friday ‍to borrow cash on capital markets to fund Ukraine’s defence against Russia rather than use frozen Russian assets, diplomats said.
At the same ​time, EU governments and the European Parliament will continue discussing setting up a loan for Ukraine that would be based on Russian central ‍bank assets.

Friday’s deal will not affect the financial obligations of Hungary, Slovakia and the Czech Republic, which did not want to contribute to the financing of Ukraine, the text said.

Kyiv will only repay the EU loan based on joint borrowing once it receives war reparations from Moscow. Until then, the Russian assets will remain immobilised, while the EU has also reserved the right to use them to repay the loan, according to the text.
“It’s good in the sense that Ukraine will secure funding for two years,” one unnamed EU diplomat told Reuters.

The move followed hours of discussions among leaders on the technical ‍and legal details of a loan based ⁠on frozen Russian assets – which turned out to be too complex or politically demanding to sort out at this stage, diplomats said.