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EU Proposes $104B Loan for Ukraine, Two-Thirds Earmarked for Military Aid
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![Photo of Cyril Barabaltchouk]( "Photo of Cyril Barabaltchouk")
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The European Commission has proposed directing two thirds of a $104 billion European Union loan for Ukraine in 2026–2027 for Ukraine’s economy, as well as weapons and military equipment purchases, as Kyiv faces mounting battlefield and budgetary pressure, according to the DW report on January 14.
Announcing the plan in Brussels, European Commission President Ursula von der Leyen said $69 billion would be allocated for military assistance, while $34 billion would go toward budgetary support.
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The defense portion, she said, would help Ukraine resist Russia while accelerating its integration into Europe’s defense-industrial base.
The military funds would prioritize procurement from Ukraine, the EU, and countries in the European Economic Area and European Free Trade Association, including Norway, Iceland, and Liechtenstein. Purchases outside Europe would be allowed only if equipment cannot be produced regionally or delivered on time, according to DW.
“Preference will be given to European manufacturers. If that is not possible, procurement abroad will follow,” von der Leyen said.
The $34 billion earmarked for budget support would be tied to reforms related to EU accession, rule of law, and anti-corruption measures. Disbursements would depend on Ukraine’s progress in meeting these conditions.
Von der Leyen stressed that the EU still reserves the right to use frozen Russian assets. While most member states backed financing the loan through EU-backed borrowing rather than direct use of Russian assets, she said the reparations-based option “remains on the table.”
Russian assets, she added, will remain frozen until the war ends, and Ukraine would not be required to repay the loan until reparations are paid, DW wrote.
The European Commission and the IMF estimate Ukraine will need $159 billion in 2026–2027 to sustain state functions and defense, with $104 billion coming from the EU and the remainder from G7 partners. European officials warned Ukraine’s budget resources could run out as early as April, prompting plans to release the first tranche that month pending swift legislative approval.
Previously, Ursula von der Leyen said Ukraine’s accession to the European Union is a key security guarantee, according to her statement on social media X.
Von der Leyen wrote on X after what she described as a discussion with European leaders on support for Ukraine, its security, and reconstruction.
