AFTER long and tough talks that went late into the night, the leaders of the European Union (EU) agreed on Friday to provide a €90 billion ($105.4 billion) loan to help Ukraine with its military and economic needs over the next two years. This decision put aside a more controversial plan to use money frozen from Russia.
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Experts say this agreement gives Ukraine some temporary help but also shows there are big disagreements within the EU.
Ukraine's need for money is much higher than what was agreed upon, so the EU is trying to keep supporting Ukraine while dealing with legal limits and political pushback.
Despite the differences, the EU has found a way to move forward.
The European Council said the loan will come from joint borrowing on global markets and will be supported by unused parts of the EU budget, which acts as a guarantee for the debt.
A senior EU official explained that this is different from a previous plan that would have used cash already frozen in the EU.
Instead, the EU will now borrow from outside sources, which means they'll pay interest. But the official said the EU budget will cover those costs, so Ukraine won't have to pay.
Because joint borrowing usually needs all members to agree, the EU made exceptions to get the deal done.
The statement said the budget guarantee won't affect the financial responsibilities of the Czech Republic, Hungary, and Slovakia. This means the initiative is really a group of 24 countries within the 27-member bloc.
Hungarian Prime Minister Viktor Orban said on X that the Czech Republic, Hungary, and Slovakia have successfully avoided joining the loan.
He called the joint borrowing as grants disguised as loans that keep the war going.
Despite earlier hesitations, German Chancellor Friedrich Merz, European Commission President Ursula von der Leyen, and other leaders quickly supported the deal, showing unity and urgency.
Analysts at the European Policy Centre (EPC) said the outcome shows ongoing disagreements about how much effort the EU is willing to put in and how much solidarity there is in Europe at a critical time for regional security.
Ukrainian President Volodymyr Zelenskyy has warned that without enough money, Ukraine might run out of funds in just a few months, which could weaken its ability to keep fighting the war.
The International Monetary Fund thinks Ukraine will need about €135 billion in 2026 and 2027 alone, leaving a funding gap of around €45 billion even after the new EU package.
Pressure is also building quickly.
Analysts at Germany's Kiel Institute warned that new aid in 2025 could drop to the lowest level since 2022, which is way below what would be needed if U.S. support decreases.
Kiel's data also show that burden-sharing within Europe is uneven.
France, Germany, and the United Kingdom have given more, while Nordic countries are the largest donors compared to their economies, and Italy and Spain have given very little.
Zhao Yongsheng, a director at the French Economy Research Center at China's University of International Business and Economics, said Europe would need 2.5 to 3 times the current €90 billion level in 2026 to stabilize the front lines in Ukraine, especially if U.S. support continues to decrease.
Belgian Prime Minister Bart De Wever said after the summit that "politics is not an emotional job" and "rationality has prevailed."
Orban was more direct, saying the idea of a reparations loan is "dead, done and dusted."
Some EU leaders still think using Russia's frozen assets should stay an option.
Last week, the Council of the EU decided to keep frozen Russian central bank assets from going back to Russia, keeping open the possibility of using them as collateral or a backup for Ukraine-related funding.
A senior EU official noted that the new joint-borrowing package is still connected to those assets, saying Ukraine would only need to repay the loan after receiving reparations.
But analysts warn that using frozen sovereign assets directly could bring back legal and political problems that stopped the reparations loan idea.
Zhao said the "reparation loan" idea pushes the limits of the current legal and institutional order and could risk crossing legal and political boundaries set after World War II.
Meanwhile, the European Council on Foreign Relations (ECFR) believes the idea might come back.
Since Ukraine needs so much money, the think tank argues that a €90 billion package is still not enough. They wrote, "In other words, this is probably not the last chapter in the story of Russia's central bank reserves."