Brussels: Members of the European Parliament have voted in favor of a substantial £90 billion loan package for Ukraine to bolster its defense and provide macro-financial assistance as the country continues to face aggression from Russia.
According to Cyprus News Agency, the approved financial package is designed to address Ukraine's urgent financial needs for the years 2026 and 2027.
The loan will be divided into two components: £60 billion is earmarked to enhance Ukraine's defense capabilities, including acquiring military equipment, primarily from Ukrainian, EU, and European Economic Area (EEA)/European Free Trade Association (EFTA) defense industries. The remaining £30 billion will be allocated for macro-financial assistance and budget support through the EU's Ukraine Facility. Should immediate sourcing challenges arise, targeted derogations will allow procurement from non-EU countries.
This financial support is contingent on Ukraine's continued commitment to democratic reforms, adherence to the rule of law, and human rights protection, including anti-corruption efforts. The loan will be funded through common EU borrowing and guaranteed by the EU's long-term budget. Debt-servicing costs, estimated at £1 billion for 2027 and £3 billion annually from 2028, will be covered by the EU's annual budgets. Ukraine is expected to repay the principal after receiving war reparations from Russia.
The legislative package was passed under an urgent procedure, with three separate votes approving the various components of the loan and related legislative amendments. The Council must still formally adopt the package, allowing the European Commission to disburse the first payment by the second quarter of 2026.
The loan was initially agreed upon at the European Council in December 2025 and presented by the European Commission in January 2026. It is intended to cover two-thirds of Ukraine's estimated financial needs for the specified period. As some EU member states, namely Czechia, Hungary, and Slovakia, opted out of backing the loan, the agreement proceeded under the enhanced cooperation procedure, enabling collaboration among willing member states.
The European Parliament's decision marks a significant step in providing substantial financial aid to Ukraine as it continues to navigate the challenges posed by ongoing conflict.