Key events
French president Emmanuel Macron has hailed the deal as a major advance, saying that borrowing on capital markets “was the most realistic and practical way” to fund Ukraine and its war efforts.
Associated Press reports that the German chancellor, Friedrich Merz, also hailed the decision.
“The financial package for Ukraine has been finalised,” Merz said in a statement, noting that “Ukraine is granted a zero-interest loan.”
“These funds are sufficient to cover the military and budgetary needs of Ukraine for the two years to come,” Merz added. He said the frozen assets will remain blocked until Russia has paid war reparations to Ukraine. Volodymyr Zelenskyy has said that would cost over €600bn.
“If Russia does not pay reparations we will — in full accordance with international law — make use of Russian immobilised assets for paying back the loan,” Merz said.
Hungarian prime minister Viktor Orbán agreed not to block the huge EU-backed loan to Ukraine as long as his country, Slovakia and the Czech Republic were excluded from the guarantees for the debt.
The deal will not affect the financial obligations of those three countries, which did not want to contribute to the financing of Ukraine, a text on the EU agreement said.
Moscow-friendly Hungary had previously said it would oppose the deal, just as it opposed the use of frozen Russian assets.
The deal followed hours of discussions among leaders on the technical 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.
“We have gone from saving Ukraine to saving face, at least that of those who have been pushing for the use of the frozen assets,” one said.
You can read more on the deal as well as other developments in the Ukraine war – including Russian strikes near the Black Sea port of Odesa – in our daily briefing here:
The EU agreement to provide Kyiv with an €90bn interest-free loan will cover most of Ukraine’s urgent financial needs but be secured against EU borrowing rather than frozen Russian assets.
As Jennifer Rankin reports from Brussels, after the summit talks ended in the early hours of Friday, the European Council president, António Costa, told reporters: “We committed and we delivered.”
He said EU leaders had approved a decision to make the €90bn (£92bn/$105bn) loan to Ukraine for the next two years backed by the EU budget, which Kyiv would repay only once Russia paid reparations.
Costa added: “The union reserves its right to make use of the immobilised assets to repay this loan.”
EU leaders entered the summit on Thursday with many wanting to secure the urgently needed loan against some of Russia’s €210bn frozen assets on the continent. But the plan fell over on the demand of Belgium, which hosts 88% of the Russian funds in the EU, to have unlimited budget guarantees from other member states if Moscow won a successful claim for damages.
Belgium’s prime minister, Bart De Wever, said the reparations loan was not a good idea and had a lot of loose ends. “And if you start pulling at the loose ends in the strings, the thing collapses.”
You can read the full report here:
Opening summary
Welcome to our live coverage of the latest developments in the Ukraine war.
Volodymyr Zelenskyy has said he is grateful to European Union leaders after they agreed on a plan to provide Ukraine a €90bn ($105bn) loan to cover its looming budget shortfalls.
“This is significant support that truly strengthens our resilience,” the Ukrainian president said in a post on X on Friday.
The EU leaders’ agreement came at summit talks in Brussels, but they failed to agree on using frozen Russian assets to make up the loan funds.
Zelenskyy said: “It is important that Russian assets remain immobilised and that Ukraine has received a financial security guarantee for the coming years. Thank you for the result and for unity. Together, we are defending the future of our continent.”
The agreement came after EU leaders settled on granting an interest-free loan for the next two years backed by the bloc’s common budget, providing Kyiv a lifeline as Donald Trump pushes for a quick deal to end Russia’s near-four-year war in Ukraine.
“Today’s decision will provide Ukraine with the necessary means to defend itself and to support the Ukrainian people,” said European Council head Antonio Costa, who chaired the summit.
Meanwhile, US and Russian representatives are set to hold fresh talks on Ukraine in Miami at the weekend as Trump urged Kyiv to move “quickly” on reaching a peace deal.
In key developments:
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The leading option at the EU summit had been to tap about €200bn of Russian central bank assets frozen in the EU to generate a loan for Kyiv but that fell through after Belgium – where the bulk of the assets are held – demanded guarantees on sharing liability that proved too much for other countries. Belgian prime minister Bart De Wever said as the summit wrapped up that he believed “rationality has prevailed”.
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German chancellor Friedrich Merz had pushed hard for using Russia’s frozen assets but still said the final decision on the EU-backed loan “sends a clear signal” to Vladimir Putin. European Commission president Ursula von der Leyen said Ukraine would need to repay the loan only once Moscow paid for the damages it has caused.
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Hungary’s prime minister, Viktor Orbán, agreed not to block the loan to Ukraine to meet its military and economic needs for the next two years as long as his country, Slovakia and the Czech Republic were excluded from the guarantees for the debt. The deal would not affect the financial obligations of those three countries, which did not want to contribute to the financing of Ukraine, a text on the agreement said.
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Zelenskyy had urged EU leaders at the start of the summit to use the frozen Russian assets, saying: “It’s moral, it’s fair, it’s legal.” The EU estimates Ukraine needs an extra €135bn to stay afloat over the next two years.
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In Washington, Donald Trump urged Ukraine to move swiftly on a peace deal ahead of fresh talks expected in Miami this weekend. The US president told reporters in the Oval Office: “Well, they’re getting close to something, but I hope Ukraine moves quickly. I hope Ukraine moves quickly because Russia is there. And you know, every time they take too much time, then Russia changes their mind.” Trump envoys Steve Witkoff and Jared Kushner plan to meet Russian officials in Florida, a White House official said, after the envoys held talks with a Ukrainian delegation in Berlin last Sunday and Monday.
With agencies
