EU finds more money for Ukraine, but fails to reach deal to release frozen Russian assets

European unification leaders decided on fri to borrow cash in to loan 90 1000000000000 euros ($145 one million million Cdn) to Ukraine to fund its defence against Russia for the next two years rather than use frozen Russian assets, sidestepping divisions over an unprecedented plan to finance Kyiv with Russian sovereign cash.

The leaders also gave the European Commission a mandate to keep working on a so-called reparations loan based on Russian immobilized assets but that option proved unworkable for now, above all due to resistance from Belgium, where the bulk of the assets is held.

"Today we approved a decision to provide 90 billion euros to Ukraine," EU summit chair António Costa told a news conference early on Friday morning after hours of talks among the leaders in Brussels. "As a matter of urgency, we will provide a loan backed by the European Union budget."

Italian Prime Minister Giorgia Meloni also said she was "glad that common sense prevailed, that we managed to secure the necessary resources with a solution that has a solid legal and financial basis."

Ukraine thanked the European Union on Friday. The stakes for finding money for Kyiv were high because without the EU's financial help, Ukraine would run out of money in the second quarter of next year and most likely lose the war to Russia, which the EU fears would bring the threat of Russian aggression against the bloc closer.

"This is significant support that truly strengthens our resilience," Ukraine's President Volodymyr Zelenskyy wrote on the Telegram app.

The idea of EU borrowing initially seemed unworkable as it requires unanimity and Hungary's Russia-friendly Prime Minister Viktor Orbán had opposed it. But Hungary, Slovakia and the Czech Republic agreed to let the scheme go ahead as long as it did not impact them financially.

"We did not let Europe declare war on Russia by using Russian assets," Orban said on Facebook.

"This plan would have plunged Europe into war and would have imposed a burden of 1,000 billion forints ($4.2 billion Cdn) on Hungary. At the same time, 24 member states decided to provide Ukraine with a war loan for the next two years. If the Ukrainians are unable to repay the loan, these European countries will have to repay it."

Slovakia Prime Minister Robert Fico said the country rejects further financing of Ukraine's military needs.

"Slovakia will not be a part of any military loan for Ukraine, and we reject further financing, including from the resources of the Slovak Republic, of military needs, because we do not believe in a military solution to the conflict," he told reporters in Brussels.

The EU leaders said Russian assets, totalling 210 billion euros ($339 billion Cdn), will remain frozen until Moscow pays war reparations to Ukraine. If Moscow ever takes such a step, Ukraine could then use the money to pay back the loan.

"This is good news for Ukraine and bad news for Russia and this was our intention," German Chancellor Friedrich Merz said.

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The main difficulty was providing Belgium, where 185 billion euros ($298 billion Cnd) of the total Russian assets in Europe are held, with sufficient guarantees against financial and legal risks from potential Russian retaliation for the release of the money to Ukraine.

"There were so many questions on the Reparations Loan, we had to go to Plan B. Rationality has prevailed," Belgian Prime Minister Bart De Wever told a news conference. "The EU has avoided chaos and division and remained united," he said.

With public finances across the EU already strained by high debt levels, the European Commission had proposed using the Russian assets for a loan to Kyiv or joint borrowing against the EU budget. Using the latter option allowed Orbán to claim a diplomatic victory.

Kirill Dmitriev, Russian President Vladimir Putin's special envoy for investment and economic co-operation, said that "law and sanity" won.

"Major BLOW to EU warmongers led by failed Ursula — voices of reason in the EU BLOCKED the ILLEGAL use of Russian reserves to fund Ukraine," Dmitriev said on X, referring to European Commission President Ursula von der Leyen.

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Several EU leaders arriving at the summit said it was imperative they find a solution to keep Ukraine financed and fighting for the next two years.

They were also keen to show European countries' strength and resolve after U.S. President Donald Trump last week called them "weak."

"We just can't afford to fail," EU foreign policy chief Kaja Kallas said.

Zelenskyy had urged the bloc to agree to use the Russian assets to provide the funds, calling it "one of the clearest and most morally justified decisions that could ever be made."

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