EU ambassadors agree on €90bn loan for Ukraine: third countries allowed to participate
On Wednesday 4 February, ambassadors of European Union member states agreed on the mechanisms for providing Ukraine with a €90 billion loan in 2026-27, including allowing third countries to participate.
EU ambassadors approved the mechanisms for granting Ukraine a €90bn loan for 2026-27 at a meeting of the Committee of Permanent Representatives (Coreper).
"The Council mandate provides that third countries other than Ukraine or EEA-EFTA members [Iceland, Liechtenstein, Norway, Switzerland – EP], may be directly associated with the Ukraine Support Loan as far as specific defence products are concerned," the Cypriot Presidency of the Council of the EU stated.
In general, defence products are expected to be procured only from companies based in the EU, Ukraine, or EFTA/EEA countries.
"Defence products should, in principle, only be procured from companies in the EU, Ukraine, or EEA-EFTA countries. Should Ukraine's military needs require the urgent delivery of a defence product which happens not to be available in the EU, Ukraine or an EEA-EFTA country, a set of targeted derogations would apply," European Pravda's sources added.
Countries that have concluded a bilateral agreement with the EU under the SAFE Regulation, as well as countries that have entered into a security and defence partnership with the EU, will also be able to take part in the use of funds from the Ukraine loan.
"Countries that have entered into a security and defence partnership with the EU, have committed to provide a fair and proportionate financial contribution to the costs arising from borrowing, and which are providing significant financial and military support to Ukraine," the Cypriot Presidency explained.
The legislative proposals approved by EU ambassadors will now be forwarded to the European Parliament for consideration and adoption.
These include a regulation implementing the loan, a regulation amending the Ukraine Facility financial instrument, and amendments to the existing Multiannual Financial Framework (MFF) regulation to guarantee financial assistance under the EU budget.
"Once all steps are complete, the Commission will be able to disburse the first payment early in the second quarter of this year," the Cypriot Presidency said.
France and Germany previously held differing positions on the mechanisms for providing the loan to Ukraine and the participation of third countries.
At the night session of 19 December, the European Union summit approved a decision on joint borrowing for Ukraine in the amount of €90bn.
The decision was taken after the EU abandoned the option of a "reparations loan" due to opposition from Belgium, on whose territory most of the Russian assets frozen in Europe are located.
Hungary, Slovakia and Czechia refused to take part in the scheme.
On 21 January, the European Parliament approved the proposal for a Council of the EU decision allowing the creation of the Loan for Ukraine in the amount of €90bn for 2026-27.