European Parliament approves €90B Ukraine support loan package

On Wednesday, the European Parliament adopted a package of proposals aimed at supporting Ukraine with a €90 billion EU loan for 2026 and 2027, Report informs.

The Ukraine support loan will help meet Ukraine's urgent financing needs amid Russia's ongoing war of aggression, entering its fifth year.

Of the loan, €30 billion will be made available for macro-financial assistance or budget support, delivered through the EU"s Ukraine Facility. €60 billion will be allocated to strengthen Ukraine's defence capabilities and support the procurement of military equipment, ensuring timely access to critical defence products from - in principle - Ukrainian, EU, and European Economic Area (EEA)/European Free Trade Association (EFTA) defence industries. If certain defence material is not immediately available from these countries for urgent delivery to Ukraine, a set of targeted derogations will apply to sourcing it from other countries.

Financial assistance will be provided in line with Ukraine's financing needs, as set out in a financing strategy prepared by Ukraine and assessed by the Commission. The strategy will require approval by the Council.

All funding will be subject to strict conditions, including Ukraine's continued commitment to democratic governance, the rule of law, and the protection of human rights, including the rights of minorities. This includes ongoing efforts to combat corruption and strengthen democratic institutions.

The support loan will be financed through common EU borrowing from capital markets and guaranteed by the "headroom" of the EU long-term budget, and debt-servicing costs will be covered by the EU's annual budgets. The Commission has estimated the debt service costs at around €1 billion for 2027 and around €3 billion per year from 2028. Ukraine will be liable for the repayment of the principal of the loan once it receives war reparations from Russia.

The legislative acts needed to complete this support package were adopted under the Parliament's urgent procedure to ensure the provision of rapid aid to Ukraine. The proposal on the Ukraine support loan was approved with 458 votes to 140 and 44 abstentions, the proposal to amend the Ukraine Facility received 473 votes to 140, and 32 abstentions, while the proposal to amend the 2021-2027 EU long-term budget (MFF) secured 490 votes to 130 and 32 abstentions.