The European Union has announced plans to dedicate a significant portion of a new loan programme to support Ukraine’s military needs over the next two years, while also providing substantial assistance to its war-impacted economy. This announcement was made by European Commission President Ursula von der Leyen on Wednesday.
EU leaders reached an agreement last month to offer Ukraine a €90 billion loan to address its financial needs in 2026 and 2027. Ukraine will only be required to repay this loan once Russia concludes its military aggression and compensates for the damages incurred over nearly four years of conflict.
The International Monetary Fund (IMF) projects that Ukraine will require a total of €137 billion during this period. As the Ukrainian government faces a severe financial crisis, it urgently needs these funds by spring. The EU is optimistic that additional countries, including Britain, Canada, Japan, and Norway, will help bridge the financial shortfall.
Furthermore, the IMF is preparing a new multi-billion-dollar loan for Ukraine, with an endorsement expected next month. President von der Leyen emphasised the importance of strengthening Ukraine’s position, stating, “We all want peace for Ukraine, and to achieve that, Ukraine must be in a position of strength.”
Under the proposed loan, €60 billion will be allocated to military support, while €30 billion will be allocated to budgetary aid.
“With the military assistance, Ukraine can stand strong against Russia, and at the same time it can integrate more closely into Europe’s defence industrial base,” von der Leyen told reporters.
The European Commission aims to initiate disbursements of loan funds by April, contingent on the endorsement of the spending plan by both EU member states and the European Parliament. The military portion of these funds is intended for the procurement of equipment from Ukraine, EU nations, and other participants in Europe’s economic area, including Norway. As President von der Leyen indicated, there may be circumstances where acquiring equipment from outside these regions could be more effective.
Additionally, under certain conditions, a portion of these funds may be allocated through a NATO initiative, which enables European allies and Canada to purchase arms and equipment from the United States for donation to Ukraine.
President von der Leyen underscored that Ukraine must commit to implementing pro-democracy reforms—specifically in the areas of rule of law and anti-corruption measures—to qualify for these loans. She stated that these conditions are non-negotiable for any financial support. Ukraine has faced significant corruption-related challenges for several decades. The situation has intensified, particularly following the resignation of President Volodymyr Zelenskyy‘s chief of staff, Andrii Yermak, last year, after anti-corruption investigators searched his residence. Yermak played a key role as Ukraine’s lead negotiator in discussions with the United States to resolve the ongoing conflict.
This article used information from The Associated Press.
