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Deal Reached After Prolonged Negotiations

European Union member states have formally agreed to commit €90 billion, equivalent to about $105.5 billion, in financial assistance to Ukraine over 2026 and 2027. The decision follows months of intense negotiations among EU governments over how to fund long term support for Kyiv as the war with Russia continues.

EU Council President Antonio Costa confirmed the agreement on Friday, stating that all member states had signed off on the package. The funding provides Ukraine with a clear financial runway for the next two years, offering predictability at a time when budget pressures remain acute.

How the Funding Will Be Raised

Rather than drawing directly on frozen Russian assets, EU leaders chose to finance the package through joint borrowing backed by the EU budget. The move mirrors previous collective borrowing initiatives used during the pandemic era and reflects a compromise between political support for Ukraine and legal caution within the bloc.

The debate had centered on roughly €210 billion in frozen Russian central bank assets held within the EU, the majority of which are located in Belgium. While some governments favored using those funds to create a reparations style loan for Ukraine, others warned of legal uncertainty, potential court challenges, and risks to the credibility of Europe’s financial system.

Belgian Prime Minister Bart De Wever was among those calling for firm legal guarantees before approving any use of Russian assets, citing concerns over liability and future litigation.

Ukraine’s Position and Calls for Stronger Action

Ukrainian President Volodymyr Zelenskyy publicly urged EU leaders this week to increase financial support and to make a definitive decision on frozen Russian assets. He argued that sustained and predictable backing is essential to keep Ukraine economically resilient and to prevent Russia from escalating the conflict further in 2026.

While the final agreement stopped short of seizing Russian assets, EU leaders emphasized that the chosen financing structure still delivers the scale and certainty Ukraine needs to function and plan ahead.

Conditions and Political Messaging

Antonio Costa stressed that the loans extended under the new package are politically linked to the principle of reparations. He stated that Ukraine would only be expected to repay the funds once Russia pays reparations for the damage caused by the war.

He also reiterated the EU’s broader political stance, saying that a ceasefire and a negotiated peace remain the only viable path forward, while emphasizing that Europe’s financial and political support for Ukraine would remain firm regardless of diplomatic developments.

Existing Support and Broader Financial Context

The newly approved funding builds on substantial assistance already delivered by the EU. Through the Ukraine Facility and related programs, Brussels has provided multiple tranches of aid, including roughly €6 billion in bridge financing to cover urgent short term budget needs.

In addition, Ukraine has received €18.1 billion in loans this year under a G7 led initiative designed to stabilize its public finances. Taken together, total EU support to Ukraine since the start of Russia’s full scale invasion in 2022 has exceeded €187 billion, encompassing military aid, macro financial assistance, humanitarian support, and refugee related spending.

Strategic Implications for Europe and the War

Beyond the immediate financial impact, the agreement sends a strategic signal. By locking in funding through 2027, the EU is positioning itself as a long term guarantor of Ukraine’s economic stability and reinforcing its influence alongside the United States in shaping any future peace process.

The package also strengthens Europe’s hand as U.S. led diplomatic efforts continue. In late November, American and Ukrainian officials met in Geneva to refine a proposed peace framework aimed at narrowing differences over how the conflict might end.

Reports indicate that the U.S. proposal included sensitive provisions on territorial control and security arrangements, including freezing current front lines and addressing Ukraine’s future military posture and NATO ambitions. Several of those elements have proven difficult for Kyiv to accept.

What This Means Going Forward

The approval of more than $105 billion in aid provides Ukraine with a vital financial backstop at a critical stage of the war. For the European Union, the deal balances solidarity with legal prudence, ensuring continued support without immediately testing the legal boundaries surrounding frozen Russian assets.

As the conflict enters another year, the agreement underscores Europe’s commitment to sustaining Ukraine economically while keeping diplomatic pressure on Russia and remaining actively involved in shaping the path toward a negotiated end to the war.