EU Greenlights €90 Billion Ukraine Loan, But Controversy Brews Over Funding & Procurement
Brussels, Belgium – January 15, 2026 – In a move hailed as critical for Ukraine’s survival but fraught with political and financial hurdles, the European Union Commission has announced a €90 billion loan package for the war-torn nation. The decision, reached after months of deadlock, comes as Ukraine faces a projected €137 billion funding gap for 2026 and 2027, and as peace talks mediated by the US continue to stall. This is a developing story, and Archyde is providing up-to-the-minute coverage.
Plan B: A Loan Secured, But at What Cost?
The loan, structured as an interest-free arrangement, will be split between €60 billion for military assistance and €30 billion for essential budget support, with the first tranches expected to be disbursed by April. However, this agreement represents “Plan B” for many EU leaders, who initially favored utilizing the approximately €210 billion in Russian assets frozen within Europe. The shift comes after significant resistance, particularly from Belgium, which hosts Euroclear, the primary depositary for these assets. Belgian Prime Minister Bart de Wever has voiced serious concerns about potential legal challenges from Russia and the financial repercussions for Euroclear should the assets be seized.
The fear isn’t unfounded. International law surrounding the seizure of sovereign assets is complex and often murky. While the intent is to hold Russia accountable for the devastation in Ukraine, a legal battle could be protracted and costly, potentially undermining the very financial stability the EU aims to protect. This is a crucial point often overlooked in discussions about asset seizure – it’s not a simple matter of transferring funds.
Divided Fronts: Czech Republic, Hungary & Slovakia Opt Out
Further complicating matters, the Czech Republic, Hungary, and Slovakia have chosen not to guarantee the loan, meaning they won’t be liable for potential interest payments, estimated to reach up to €4 billion annually. This decision reflects growing skepticism within these nations regarding continued financial support for Ukraine. Hungary’s Prime Minister Viktor Orbán bluntly labeled the loan as “lost money,” questioning Ukraine’s ability to repay. This highlights a fundamental tension within the EU: a desire to support Ukraine versus concerns about fiscal responsibility and the long-term economic implications.
Evergreen Insight: The debate over financial aid to Ukraine underscores the broader challenges of coordinating economic policy within the EU, particularly during times of crisis. The differing priorities and economic realities of member states often lead to compromises that dilute the effectiveness of collective action. This dynamic is a recurring theme in EU history, from the Eurozone crisis to migration policy.
The ‘Buy European’ Battle: Speed vs. Sovereignty
Even among the 24 EU member states backing the loan, disagreements persist. A fierce debate is raging over a proposed “Buy European” clause for the €60 billion military aid portion. France, eager to bolster its domestic defense industry, is pushing for the majority of funds to be spent on European-made weapons. Germany and the Netherlands, however, argue that Ukraine needs immediate access to critical systems, even if they originate outside of Europe, particularly from the United States.
Ukraine is heavily reliant on US-made weaponry, including Patriot missile systems, Javelin anti-tank missiles, and Stinger air defense systems. Imposing strict “Buy European” requirements could create dangerous delays in delivering essential equipment, potentially jeopardizing Ukraine’s defense capabilities. The EU Commission is attempting to navigate this conflict with a “cascade logic” – prioritizing European procurement but allowing for exceptions when necessary. However, the pressure from Washington, and the potential wrath of a future Trump administration, looms large. US President Trump has consistently advocated for prioritizing the US economy in aid packages.
Evergreen Context: The reliance on US military aid highlights the ongoing strategic dependence of Europe on the United States for defense. This dependence has fueled calls for greater European defense integration and the development of a more robust and independent European defense industry. The Ukraine conflict is accelerating this trend, but significant challenges remain in overcoming national interests and bureaucratic hurdles.
Ursula von der Leyen is walking a tightrope, attempting to balance European economic interests with the urgent needs of Ukraine and the geopolitical realities of a potentially shifting US political landscape. The success of this loan, and indeed Ukraine’s future, may hinge on her ability to navigate these complex and competing pressures.
Stay with Archyde for continuing coverage of this critical story and its implications for Europe and the world. Explore our World News section for in-depth analysis and breaking updates on global events.
