Ukraine hails €90bn EU loan as Putin calls plan ‘robbery’

Ukraine has welcomed the European Union’s decision to provide €90 billion in support over the next two years, calling it a vital lifeline even as the bloc failed to reach agreement on using frozen Russian assets to finance the aid.

Ukraine welcomed the decision, with President Volodymyr Zelenskyy saying the package sent a clear message to Moscow.

He said the funding showed Russia there was “no point” in continuing the war because Kyiv would remain financially supported.

“The decision reached in Brussels overnight is a victory for Ukraine,” Zelenskyy said on Friday.

He noted that the country faces a $45 billion budget gap next year and said the EU funds would be used for social and humanitarian needs as well as to support defence efforts.

European officials have warned that without continued EU assistance, Ukraine could run out of money by the second quarter of next year, potentially weakening its ability to resist Russia and bringing the threat of Russian aggression closer to the bloc.

“This is significant support that truly strengthens our resilience,” Zelenskyy wrote earlier on Telegram.

Russian President Vladimir Putin said the European Union had abandoned plans to use frozen Russian state assets to support Ukraine because doing so would have carried serious consequences.

His comments came after EU leaders agreed to provide Ukraine with a €90 billion loan over the next two years, opting to raise the money through borrowing rather than by backing the loan with immobilised Russian assets.

The original proposal had proved politically and legally difficult to resolve.

Speaking at his annual end-of-year press conference, Putin described the initial plan to use Russia’s frozen assets as “daylight robbery”.

“Why can’t this robbery be carried out? Because the consequences could be grave for the robbers,” he said.

Putin warned that using the assets would undermine trust in the euro zone and discourage countries from holding their reserves there, particularly oil-producing states that store foreign currency and gold in Europe.

A major obstacle to the reparations-loan proposal was the concern of Belgium, where around €185 billion of the frozen Russian assets in Europe are held.

Belgian officials sought firm guarantees against financial and legal risks, including potential Russian retaliation.

German Chancellor Friedrich Merz, who strongly backed the asset-based loan, said the final outcome still met Ukraine’s needs. 

“This is good news for Ukraine and bad news for Russia — and that was our intention,” he said.

Ukraine’s deputy foreign minister, Sergiy Kyslytsya, acknowledged the difficulty of the talks, saying: “There are moments when one should remember that ‘perfect is the enemy of good’.”

Economists also welcomed the agreement. Carsten Brzeski, global head of macro research at ING think tank, said failure to reach a deal would have been damaging.

“If Europe hadn’t found a solution, it would have been a symbolic disaster,” he said, adding that there should be sufficient investor appetite for the new loan.

Separately, EU leaders also discussed other priorities at the summit, with Chancellor Merz and European

Commission President Ursula von der Leyen expressing confidence that the bloc could still sign a contentious free trade agreement with the Mercosur group of South American countries in January, despite divisions among member states.

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