BRUSSELS — The EU is preparing to rubber-stamp the terms and conditions underpinning the bloc’s €90 billion loan to Ukraine as soon as Monday, two EU officials told POLITICO.
The green light will mean Kyiv is one step closer to getting more than €9 billion as its first installment from Brussels in mid-June to cover any immediate budgetary shortfalls and buy drones to help defend against Russian forces.
The planned payouts are tied to the €90 billion loan that EU leaders agreed to provide Ukraine in December to help fund its defense against Russian troops after four years of war. Kyiv faces a budget shortfall of at least €135 billion this year and next, and will run out of money in the coming months without more financial support.
Before that money can be paid out, a “memorandum of understanding” is required for setting terms tied to any macro financial assistance that’ll come from the €90 billion lifeline, which is backed by the EU budget.
Leaders agreed to issue joint debt to finance the loan in December after talks collapsed over a controversial plan to leverage frozen Russian state assets, the majority of which are held in Belgium, to buttress Ukraine’s finances.
Half of the €90 billion loan will be paid out this year, and the rest in 2027. The European Commission will continue to lobby Canada, Japan, the U.S. and the U.K. to cover the rest of Ukraine’s budget shortfall next week when finance ministers from the world’s seven largest advanced economies convene in Paris, one of the officials said.
The officials, who were directly briefed on the plans and granted anonymity to speak freely on a sensitive issue, expect the EU executive to unveil the MoU on Tuesday after EU commissioners have waved the document through the day before.
Commissioners will meet again soon to sign off on the €90 billion loan once Kyiv and Brussels have discussed the fine print over how to repay the debt with war reparations from Moscow.
Should the Kremlin refuse to pay those reparations after the war ends, EU leaders have said they reserve the right to use the frozen Russian state assets to settle the loan — thereby canceling the debt that Kyiv owes.
Ratification
Ukraine’s national assembly will need to ratify the deals before the first disbursements are made. The Ukrainian government was not immediately available to comment on the parliamentary timeline and any possible challenges that could emerge from lawmakers.
If all goes to plan, Brussels will first purchase drones worth €5.9 billion next month to shore up Kyiv’s defenses. The Commission will then wire €3.2 billion to Kyiv, which the government can use to cover budgetary and administrative costs, including paying soldiers’ salaries.
“The Commission aims to make the first disbursement as early as possible in the 2nd quarter of 2026,” a spokesperson for the EU executive said. “The first disbursement will cover the purchase of drones from Ukraine, for Ukraine.”
Despite recent progress, EU officials and diplomats are mindful that Kyiv will need more money next year. Ukraine’s estimated budget shortfall of €135 billion is based on the assumption that the war will end this year, a scenario that is considered increasingly unlikely.
Back-to-back crises have stretched the finances of many EU governments, which are also trying to rein in their spending while contending with rising fuel prices stemming from tensions in the Middle East. Raising fresh funds for Ukraine on short notice could prove problematic if EU capitals are reluctant to take on more common debt.
The Dutch have been canvassing support in recent weeks for reviving the debate around leveraging frozen Russian sovereign assets to prop up Kyiv, before another cash crunch materializes.
“The EU, its member states and European financial institutions have provided, so far, a total of €200.6 billion to Ukraine,” the Commission spokesperson said. “The EU is by far the largest and most stable financial partner of Ukraine.”
