On December 19, 2025, after marathon talks stretching into early morning, European Union leaders agreed to a €90 billion loan package aimed at bolstering Ukraine's military and economy over the next two years. While the move offers crucial relief, it also exposes deep rifts within the 27-member bloc.
A bloc united… but not entirely
The deal will be financed through joint EU borrowing on capital markets, backed by unused EU budget headroom as a guarantee. But reaching unanimity proved tricky: the Czech Republic, Hungary and Slovakia secured opt-outs, effectively creating a 'coalition of 24' for a measure that usually needs full approval.
Hungarian Prime Minister Viktor Orban wrote on X: 'Joint borrowing for Ukraine? Grants disguised as loans fueling conflict. Hungary, the Czech Republic and Slovakia have successfully stayed out of it.'
Despite these snubs, key figures like German Chancellor Friedrich Merz and European Commission President Ursula von der Leyen rallied behind the deal, underscoring the urgency of Ukraine's plight.
Crunching the numbers
Ukrainian President Volodymyr Zelenskyy has warned that without firm funding, Kyiv could run out of cash within months. The International Monetary Fund projects Ukraine will need about €135 billion in 2026 and 2027, leaving a gap of roughly €45 billion even after this package.
Data from Germany's Kiel Institute suggests new aid commitments in 2025 could fall to their lowest since 2022, risking a shortfall if U.S. support eases. It also highlights uneven burden-sharing: Nordic countries lead contributions relative to GDP, while Italy and Spain lag behind.
Zhao Yongsheng, director of the French Economy Research Center at the University of International Business and Economics in the Chinese mainland, estimates Europe would need 2.5 to 3 times the current €90 billion level in 2026 to stabilize Ukraine's front lines if U.S. backing wanes.
Frozen assets still in play?
Originally, a 'reparations loan' tapping seized Russian assets was on the table, but it faced legal and political hurdles. Belgian Prime Minister Bart De Wever declared that 'rationality has prevailed,' while Orban called the idea 'dead, done and dusted.'
Yet EU officials insist the new joint-borrowing package remains indirectly linked to those assets, noting Ukraine would only start repaying once any reparations materialize. Think tanks like the European Council on Foreign Relations argue this issue is far from settled.
The road ahead
With Kyiv's financing needs continuing to outpace commitments, EU leaders face mounting pressure to deepen support. The €90 billion deal may buy time, but it also sets the stage for further debates over solidarity, legal limits and Europe's readiness to wield its economic power at a critical moment for regional security.
Reference(s):
EU approves 90-bln-euro loan for Ukraine amid internal divisions
cgtn.com
