EU loan for Ukraine cleared, with three countries opting out of guarantee
Illustrative photo: the interest on Ukraine’s loan will be covered by EU countries (Getty Images)
Today, February 4, EU ambassadors approved the provision of a €90 billion loan to Ukraine. The interest will be covered by the European budget, according to the EU Council.
Read also: EU names date for first tranches of €90 billion loan to Ukraine
Now, the EU Council must reach an agreement with the European Parliament on the final legal texts concerning aid to Ukraine. After that, the European Commission will be able to transfer the first payment at the beginning of the second quarter of 2026.
"To ensure the most favourable loan terms and to manage Ukraine’s debt sustainability, the interest cost of the loan is planned to be covered by the EU budget. This will not have an impact on the budget contributions of Czechia, Hungary and Slovakia, who have chosen not to take part in the enhanced cooperation," the EU Council stated.
The proposed scheme foresees providing Ukraine with the loan in two ways: €30 billion will be allocated as macroeconomic support — either through the Macro-Financial Assistance (MFA) mechanism or via the Ukraine Facility.
The remaining €60 billion will be directed toward investments in Ukraine’s defense-industrial complex and the country’s arms procurement.
Three countries will not finance the loan
In December of last year, three EU countries — Czechia, Slovakia, and Hungary — were allowed not to assume guarantees for financing Ukraine’s €90 billion loan.
The EU Council stated at the time that, thanks to enhanced cooperation under Article 20 of the EU Treaty regarding the instrument based on Article 212 of the Treaty on the Functioning of the EU, any mobilization of Union budget resources as a guarantee for the loan would have no impact on the financial obligations of Czechia, Hungary, and Slovakia.
Loan for Ukraine
Recently, the European Commission presented a plan to provide Ukraine with a €90 billion loan, which was approved at the summit in mid-December.
A dispute arose within the EU over granting Kyiv the €90 billion loan. The controversy was caused by questions about whether Ukraine would be able to spend the funds on weapons from the United States, as well as the allocation of loan servicing and lending fees.
In addition, some EU countries are demanding that non-EU countries be required to pay a commission for contracts concluded with Ukraine that will be financed using the €90 billion loan.
