European Parliament approves decision to establish €90bn loan for Ukraine

On 21 January, the European Parliament approved a proposal for a Council of the EU decision allowing the activation of enhanced cooperation to establish a Loan for Ukraine in the amount of €90 billion for 2026-2027.

The decision will enter into force after formal approval by the Council of the EU.

"The financial situation of Ukraine requires that the disbursement of Union financial assistance take place in the second quarter of 2026 at the latest," states the text of the Council of the EU decision supported by the European Parliament, allowing enhanced cooperation to establish the Loan for Ukraine.

The document authorises enhanced cooperation "that has as its objective and scope to provide a loan to Ukraine of €90 billion for the years 2026 to 2027 based on EU borrowing on the capital markets backed by the EU budget headroom".

"Any mobilisation of resources of the Union's budget as a guarantee for that loan will not have an impact on the financial obligations of Czechia, Hungary or Slovakia," the adopted decision states.

"Financial assistance to Ukraine mitigates the effects of Russia's actions on the security and economy of the Union and its neighbourhood. The defeat of Ukraine would increase the risk of aggression by Russia against one of the Member States or a country in the neighbourhood of Ukraine, including candidate countries, and have direct and indirect repercussions for the security and economic situation in the Union. The repercussions for the Union's economy of Russia's aggression would be even more severe if Ukraine were unable to support the fiscal efforts necessary for the continuation of its war effort," the justification for granting the loan states.

On 20 January, the European Parliament approved the use of an urgent procedure for three draft laws that would open the way for the EU to provide Ukraine with a €90 billion loan in 2026-2027.

On 18-19 December, the European Council decided to provide Ukraine with a €90 billion loan for 2026-2027, financed through EU borrowing on capital markets and backed by EU budget reserves under the enhanced cooperation mechanism with Ukraine.

On 14 January, the European Commission adopted a package of legislative proposals that would allow the EU to provide Ukraine with a €90 billion loan to cover its financial and military needs in 2026 and 2027.