European Union leaders have reached a landmark agreement to provide Ukraine with a colossal €90 billion interest-free loan, following marathon talks in Brussels that stretched deep into the night. The deal, announced on Friday 19 December 2025, is designed to cover the war-torn nation's military and budgetary requirements for the next two years.
Breakthrough After Intense Negotiations
EU Council President Antonio Costa confirmed the breakthrough, stating the loan would meet Ukraine's pressing needs. While the immediate funding mechanism was not fully detailed, leaders established a crucial condition: Ukraine will not have to repay the loan until Russia pays reparations for the damage caused by its invasion.
In a significant move, the EU reserved the right to use approximately £185 billion in Russian state assets frozen in Europe to cover the loan if Moscow ultimately refuses to pay compensation. The majority of these assets are held in Belgium, a point of contention that required delicate negotiation.
Belgian Concerns and Russian Backlash
Belgian Prime Minister Bart De Wever had expressed serious legal and financial reservations, particularly concerning the potential impact on the Belgian financial clearing house Euroclear, which holds most of the frozen funds. Negotiators worked late to provide Belgium with guarantees against potential Russian retaliation.
On the eve of the summit, Russian President Vladimir Putin launched a verbal attack, labelling European leaders "little pigs." The Kremlin has consistently denounced any plan to utilise frozen Russian assets as outright "theft." Last week, Russia's Central Bank escalated tensions by filing a lawsuit against Euroclear to block the use of the funds.
International Reactions and Parallel Moves
Ukrainian President Volodymyr Zelensky expressed understanding for Belgium's position but stressed the necessity of the decision for long-term predictability. German Chancellor Friedrich Merz hailed the zero-interest loan, and French President Emmanuel Macron called the summit a success for Ukraine, noting protections for Hungary, Slovakia, and the Czech Republic.
In a separate but related development, the EU imposed new sanctions on 41 vessels in Russia's "shadow fleet," bringing the total number of designated ships to nearly 600. These measures aim to curb Moscow's ability to circumvent oil sanctions.
Meanwhile, President Zelensky confirmed that a Ukrainian peace delegation is en route to the United States for talks scheduled for Friday and Saturday, underscoring the continued diplomatic efforts to end the conflict.
