Funding Ukraine's recovery and defense

The European Commission is proposing a decision to approve financial assistance for Ukraine under the Ukraine Support Loan for 2026 and 2027. The European Council previously agreed to a total loan of EUR 90 billion for these two years. This proposal approves EUR 45 billion for Ukraine to use until December 31, 2026.

The assistance is divided into two main parts:

• EUR 16.7 billion for budget assistance. This includes EUR 8.35 billion in loans and EUR 8.35 billion in macro-financial assistance.
• EUR 28.3 billion to support Ukraine's defense industrial capacities.

The macro-financial assistance will be paid in three installments: EUR 3.2 billion, EUR 3.7 billion, and EUR 1.45 billion.

To receive this money, Ukraine must continue to uphold democratic mechanisms, the rule of law, and human rights, including fighting corruption. The loan will be repaid by Ukraine only after reparations are received from Russia. Until then, assets from the Central Bank of Russia will remain frozen to help repay the loan. The money will not be released until a guarantee for the loan is available. The plan assumes the war will continue in 2026 and uses an exchange rate of EUR 1 = UAH 49.356. The European Commission confirmed that Ukraine's financial plan is complete and consistent with data from the International Monetary Fund and other donors. The decision will take effect immediately upon publication. Some EU budget guarantees will not affect the Czech Republic, Hungary, and Slovakia.

Broader context

This legislation is part of the EU’s ongoing support for Ukraine in response to Russia’s invasion. The EUR 90 billion total loan for 2026–2027 is a continuation of previous EU financial aid, which has already included significant military, humanitarian, and economic assistance. The EU is using frozen Russian assets as a security mechanism, ensuring that Ukraine can focus on its defense and recovery without immediate repayment pressure. The proposal aligns with broader international efforts, such as those by the IMF and other donors, to stabilize Ukraine’s economy and strengthen its ability to resist Russian aggression.

Impact on people living in the EU

The financial assistance is funded through the EU budget, but some member states (Czech Republic, Hungary, and Slovakia) are exempt from providing guarantees. Most EU citizens will not directly feel the financial impact, as the costs are spread across the EU budget and backed by frozen Russian assets. However, the decision reinforces the EU’s commitment to collective security and stability in Europe, which benefits all member states by supporting a neighboring country under attack. The focus on Ukraine’s defense industry also aims to bolster European security in the long term.