EU plans €90bn loan to help Ukraine rebuild and grow

Summary of the EU Proposal for a Ukraine Support Loan

• Purpose
  The European Union wants to give Ukraine a new loan of €90 billion for the years 2026‑2027. The money will help Ukraine meet its urgent budget needs caused by Russia’s war, support its defence industry, rebuild damaged infrastructure, and strengthen rule‑of‑law and anti‑corruption reforms.

• How it works

• The loan is a limited‑recourse loan backed by EU borrowing on the capital markets.
• The EU will cover the borrowing costs through a borrowing‑cost subsidy.
• Repayment will come from reparations that Russia must pay.
• The loan will be channeled through the existing Ukraine Facility (Regulation (EU) 2024/792), specifically Pillar I – the Ukraine Plan.

• Legal basis
  The proposal is based on Article 212 of the Treaty on the Functioning of the EU, which allows the Union to give financial assistance to non‑developing third countries.

• Why it is needed

• Russia’s invasion began on 24 Feb 2022 and has devastated Ukraine’s economy and infrastructure.
• Ukraine’s 2026‑2027 financing needs are now higher than the IMF’s latest projections.
• The EU, G7, and other partners have agreed that additional funding is essential to keep Ukraine’s economy stable and to support its path toward EU membership.

• Budget impact

• The €90 billion loan fits within the EU’s 2021‑2027 multi‑annual financial framework.
• No new budget lines are required; the money will be drawn from existing EU borrowing capacity.
• The proposal will not affect EU revenue streams.

• Monitoring and accountability

• The Commission will manage the loan and report annually to the European Parliament and the Council.
• An independent evaluation will be carried out by 31 Dec 2031.
• Ukraine must meet the conditions of the Ukraine Plan, including reforms and rule‑of‑law measures.

• Digital and data aspects

• Information exchange (financial reports, audit data) will use secure EU systems.
• No new digital services are created; existing Commission platforms will be used.

• Key dates

• European Council agreed on the €90 billion loan on 18 Dec 2025.
• The regulation will enter into force the day after its publication in the Official Journal.

This proposal aims to give Ukraine the financial support it urgently needs while ensuring that the EU’s resources are used efficiently and transparently.