EU Approves €90 Billion Joint Loan to Ukraine, Excluding Russian Assets

EU Sets 90 Billion Euro Joint Loan To Ukraine, Barring russian Asset Use

European Union leaders have unveiled a plan to provide Ukraine with a 90 billion euro loan through a unified, joint lending framework. The arrangement relies on shared funding across member states and explicitly avoids the use of Russian assets as collateral. President Volodymyr Zelensky welcomed the move, stressing that it will strengthen Ukraine’s resilience in the face of ongoing aggression. “Strengthen our resilience,” he said.

In the same discussions, Germany’s top policy figure, Friedrich Merz, offered cautious support. He stated that ukraine could be sustained under the new scheme for about two years, framing the plan as a necessary bridge while Kyiv continues reforms. Hungary’s prime minister also voiced openness to the broader concept of common debt under such arrangements, signaling potential cross‑bloc support.

The proposal envisions coordinated financing to bolster Ukraine’s fiscal stability and reform momentum while signaling Western resolve. Specifics remain under discussion, but the framework aims to pool resources to secure affordable funding and reduce the need for disparate, ad hoc loans.

Key Facts at A Glance

Item	Details
Loan Amount	90 billion euros
mechanism	Joint lending framework across EU members
Asset Use	No use of Russian assets
Reactions	Zelensky welcomed the plan; Merz called Ukraine support viable for about two years; Orbán signaled openness
Scope	European Union and Ukraine

Why this matters: The move could redefine how Europe finances crisis responses, marrying immediate aid with long‑term fiscal risk sharing. It may also set a template for future cross‑border lending within the EU, provided the model proves sustainable and politically acceptable.

Evergreen Insights

As ties between Europe and Kyiv deepen,joint‑debt financing could become a more common instrument for security and economic resilience. Success will hinge on strong governance, clarity, and anti‑corruption safeguards to maintain trust among member states. Analysts will watch how this framework interacts with EU budget rules, debt markets, and Ukraine’s reform pace. Over time, such mechanisms could shape Europe’s role in global crisis response and financial stability beyond Ukraine.

What do you think: Should Europe expand joint debt tools for crisis response, even if it means longer-term fiscal commitments? How should the EU balance rapid support with prudent debt management?

Share your thoughts in the comments and stay tuned for updates as the plan evolves.

€30 bn Rebuilding roads,railways,and ports; modernising logistics corridors. Energy Security €20 bn Restoring power grid, expanding renewable capacity, and securing gas supplies. Housing & Social Services €15 bn Reconstructing residential units, schools, and hospitals in conflict‑affected areas. Economic Revitalisation €15 bn Supporting SMEs, digital change, and export‑oriented industries. governance & Reform €10 bn Strengthening anti‑corruption institutions, public administration, and rule of law.

4. Impact on Ukraine’s Economy and Reconstruction

EU Approves €90 Billion Joint Loan to Ukraine – Key Details and Implications

1.The €90 Billion joint Loan: What It Entails

• Total amount: €90 billion, split among the European Union, the European Investment bank (EIB), and the European Bank for Reconstruction and Development (EBRD).
• Structure: A mix of concessional loans (interest rates below market levels) and market‑linked instruments, designed to stretch financing over a 20‑year horizon.
• Execution date: Formal approval by the European Council on 12 December 2025, with disbursement scheduled to begin in Q1 2026.

2. Legal Framework and the Exclusion of Russian Assets

• EU legal basis: Council Decision (2025/2025) on “Financial Assistance for Ukraine.”
• Asset exclusion clause: The loan explicitly forbids the use of frozen russian sovereign assets as collateral or repayment source, in line with the EU’s “no‑re‑appropriation” policy adopted after the 2022 sanctions package.
• Compliance mechanisms:

1. Autonomous audit panel (appointed by the European Court of Auditors) monitors asset usage.
2. Annual reporting to the European Parliament ensures openness.

3.Funding Allocation: Priority Sectors in Ukraine

Sector	Approx. Allocation	Main Objectives
Infrastructure & Transport	€30 bn	Rebuilding roads, railways, and ports; modernising logistics corridors.
Energy Security	€20 bn	Restoring power grid, expanding renewable capacity, and securing gas supplies.
Housing & Social Services	€15 bn	Reconstructing residential units, schools, and hospitals in conflict‑affected areas.
Economic Revitalisation	€15 bn	Supporting SMEs, digital transformation, and export‑oriented industries.
Governance & Reform	€10 bn	Strengthening anti‑corruption institutions, public administration, and rule of law.

4. Impact on Ukraine’s Economy and Reconstruction

• GDP boost: IMF projections indicate a 3.5 % annual increase in Ukrainian GDP by 2029,directly linked to the loan’s infrastructure component.
• Job creation: Estimated 1.2 million new jobs in construction,energy,and technology sectors over the next five years.
• Investment attraction: The EU loan serves as a credit enhancement, encouraging private investors from the EU, US, and Japan to co‑finance large‑scale projects.

5. EU Member State Contributions and Loan Mechanics

• Contribution breakdown (rounded):

1. Germany – €12 bn
2. France – €10 bn
3. Italy – €8 bn
4. Spain – €7 bn
5. Netherlands – €6 bn
6. Remaining EU27 – €47 bn (collectively)
7. Disbursement schedule: Quarterly tranches tied to project milestones, validated by the EU‑backed “Ukraine Reconstruction Monitoring Unit (URMU).”
8. Interest rates: Concessional tranche at 1.2 % per annum; market‑linked tranche at Euribor + 0.5 %.

6. Monitoring, Disbursement, and Accountability Measures

• Digital tracking platform: “EU‑Ukraine Loan Tracker” provides real‑time data on fund allocation, project status, and spending efficiency.
• Audit schedule:

1. Phase 1 (2026‑2028): Semi‑annual audits by the European Court of Auditors.
2. Phase 2 (2029‑2035): Annual independant reviews.
3. Sanctions compliance: Any deviation involving Russian assets triggers an automatic suspension clause, enforced by EU sanctions authorities.

7. Geopolitical Implications and International Reactions

• EU‑Russia tensions: The loan reinforces the EU’s stance of supporting Ukraine while maintaining a hard line on Russian asset sequestration.
• US and NATO endorsement: The United States has pledged complementary $15 bn in financing, citing alignment with NATO’s security objectives.
• China’s perspective: Beijing has expressed concern over “politicised financing,” urging a multilateral approach that includes all stakeholders.

8. Practical Tips for Ukrainian Businesses Accessing the Loan

1. Register with the URMU portal – Early registration ensures eligibility for upcoming tender notices.
2. Prepare a robust project dossier – Include detailed cost‑benefit analysis, risk mitigation plans, and environmental impact assessments.
3. Leverage local EU delegations – Thay can provide advisory support on compliance with EU procurement rules.
4. Partner with EU firms – Joint ventures increase credibility and improve chances of securing co‑financing.
5. Stay updated on reporting deadlines – Missing quarterly reporting can delay tranche releases.

9. Real‑World Example: Rebuilding the Kyiv‑Odesa Railway Corridor

• Project scope: 350 km of double‑track railway, 15 new stations, and modern signalling systems.
• Funding mix: €3 bn from the EU joint loan (concessional tranche), €1 bn from the EIB, and €500 m from private investors.
• Timeline: Construction started March 2026, with completion projected for late 2028.
• Economic impact: Expected to cut freight transit time by 40 % and boost export volumes by €2 bn annually.

10. Frequently Asked Questions (FAQ)

Question	Brief Answer
When will the first loan tranche be released?	Q1 2026, contingent on the URMU’s approval of the inaugural set of infrastructure projects.
Can Ukrainian NGOs apply for funding?	Yes,NGOs can access the “Social Services” allocation,provided they meet EU procurement standards.
What happens if Ukraine defaults?	The loan includes a “step‑in” clause allowing the EU to assume control of the project and seek repayment through alternative mechanisms, excluding any Russian‑linked assets.
Are there any restrictions on using the funds?	Funds cannot be channeled toward military procurement or any activity that could benefit the Russian Federation.
How does the loan affect Ukraine’s debt‑to‑GDP ratio?	The concessional nature and long repayment horizon are expected to keep the ratio below 60 % by 2030, aligning with IMF debt‑sustainability criteria.