On 18 December 2025, the European Council agreed to a €90 billion loan to Ukraine to cover the country's financial needs in the years 2026 and 2027. The European Commission has subsequently presented three legislative proposals to implement the European Council's decision: (i) a proposal for a €90 billion Ukraine Support Loan financed by the EU except for Czechia, Hungary and Slovakia; (ii) a proposal to amend the Ukraine Facility to use it for the disbursement of the new loan; and (iii) a proposal to amend the EU's multiannual financial framework to use it as a guarantee for the loan, and to finance the grants used for the borrowing cost subsidy. The loan will be financed through EU borrowing on the capital markets backed by the EU budget's headroom. The EU budget will pay for the interest rates and other associated costs for Ukraine. While €30 billion of the loan are meant to support the Ukrainian budget, €60 billion will be used to strengthen Ukraine's defence capabilities. The Commission proposal stipulates that defence products financed from the loan should, in principle, originate from the EU, European Economic Area, European Free Trade Area and Ukraine. Only if products are not available there, or cannot be delivered fast enough, can products from other third countries be bought. In the past, Article 41(2) of the Treaty on European Union had been seen as an obstacle to financing weapons and military equipment from the EU budget. However, as the proposed Ukraine Support Loan is based on Article 212 of the Treaty on the Functioning of the European Union, the rules on the EU's common foreign and security policy do not apply. Source : © European Union, 2026 - EP Read more