The European Union will dedicate most of its new €90 billion ($105 billion) loan program to Ukraine’s military needs over the next two years, while also providing billions in economic support, European Commission President Ursula von der Leyen said Wednesday.
EU leaders agreed last month to the loan to cover Ukraine’s needs in 2026 and 2027. Kyiv will only have to repay the money after Russia ends the war and pays reparations for almost four years of destruction.
The International Monetary Fund estimates Ukraine will need €137 billion ($160 billion) over the two years. The Ukrainian government is on the brink of bankruptcy and urgently needs funds by spring. EU officials hope countries such as Britain, Canada, Japan, and Norway will help cover the gap. The IMF is preparing a new multi-billion-dollar loan for Ukraine, expected to be approved next month.
Von der Leyen said €60 billion ($70 billion) of the EU loan will go to military support and €30 billion ($35 billion) for budget aid. “With military assistance, Ukraine can stand strong against Russia, and at the same time integrate more closely into Europe’s defense industry,” she said.
The EU aims to start disbursing funds by April, but the spending plan requires approval from member states and the European Parliament. The military funds would be used to buy equipment from Ukraine, EU countries, and others in Europe, including Norway. In some cases, purchases could be made outside Europe if more effective. Some money could also be used under a NATO scheme for allies, including Canada, to buy US arms for Ukraine.
Von der Leyen emphasized that Ukraine must implement pro-democracy reforms, including strengthening the rule of law and fighting corruption, to secure the loans. “These conditions are non-negotiable for any financial support,” she said.
Ukraine has faced corruption for decades. Pressure grew on President Volodymyr Zelenskyy last year after his chief of staff Andrii Yermak resigned following an anti-corruption investigation. Yermak also led US-Ukraine talks aimed at ending the war.