EU leaders have agreed to provide Ukraine with a €90bn loan to fund its war effort for another two years – but there’s been no deal reached on using frozen Russian assets. Follow the latest here.
Friday 19 December 2025 08:10, UK
By Ivor Bennett, Moscow correspondent
We’re in the queue for Vladimir Putin’s annual end-of-year address along with hundreds of other journalists.
It’s always a marathon event – last year, the Kremlin leader spoke for four and a half hours. He’ll be fielding questions from both the media and the public.
Ordinary Russians phone in to voice their concerns directly to the president, with the whole thing carried live on all the main TV channels.
It’s designed to show Russians that their leader has everything under control – no matter the problem, he can fix it.
I expect there’ll be a degree of gloating regarding the EU’s decision not to deploy the frozen Russian assets to help Ukraine.
And I’m sure he’ll address the latest developments in the peace talks – most probably to double down on Moscow’s demands.
European leaders have been quick to praise the EU’s latest funding package for Ukraine, agreed after late-night talks in Brussels.
Germany’s Friedrich Merz says the new €90bn loan “sends a clear signal” to Vladimir Putin: “This war will not be worth it.”
In a post on social media, the chancellor added: “We will keep Russian assets frozen until Russia has compensated Ukraine.”
Emmanuel Macron said the loan “was the most realistic and practical way” to fund Ukraine.
But he said it would become “useful” at some point to reengage with Vladimir Putin, and said Europe and Ukraine should try to find the right format for possible talks.
Belgian Prime Minister Bart De Wever, the main opponent of using frozen Russian assets to back Ukraine, says EU leaders have “remained united” with the new deal.
As for those at the top of the EU, the mood is a positive one, as expected.
EU Commission President Ursula von der Leyen said: “We gathered today with a clear objective: to address Ukraine’s pressing financing needs. We delivered.”
EU Council President Antonio Costa simply said: “We committed, we delivered.”
By Alistair Bunkall, Europe correspondent
The EU has agreed a deal to fund Ukraine for the next two years, just not the one it had planned.
Talks to unlock frozen Russian assets went into the early hours of Friday morning, eventually reaching a conclusion just before 3am.
Belgium had always opposed the use of Russian assets on the basis that most are being held in a Brussels-based clearing house, therefore leaving them legally exposed to any Russian retaliation.
With support from other members, including Italy, the Belgians successfully argued for a Plan B that had initially been rejected: jointly raising a €90bn interest-free loan, borrowed against untapped funds in the bloc’s budget.
It shares out responsibility for the money more evenly across member states, although three countries – Hungary, Czechia and Slovakia – won’t be a part of the agreement.
Ukraine will have to repay the loan but at no set date and only from reparations agreed with Russia, if that ever happens.
The EU says it has reserved the right to use the frozen assets if no deal is reached between Ukraine and Russia in the future that includes reparations from Moscow.
Although he tried to celebrate it as a win, in reality, it is a setback to German Chancellor Friedrich Merz and other Eastern European states, which had argued most strongly in favour of using the Russian assets.
But Ukraine has its money, and won’t care too much how it comes.
However, the divisions in Europe won’t go unnoticed by Moscow – which will conclude its threats against Europe were ultimately successful.
Ukraine’s foreign minister has praised the EU’s decision to send a €90bn loan to Kyiv as “timely and strong”.
“Ukraine received a financial security guarantee,” Andrii Sybiha said on X, thanking EU member states for “their steadfast support”.
“Despite Russia’s hopes, Europe’s support for Ukraine will not weaken… Europe remains united and strong.”
Away from the diplomatic sphere now and back to Ukraine, with the country’s air force providing the latest figures from overnight Russian air attacks.
It says Moscow launched 160 drones at the country overnight, with 47 registering strikes at 23 separate locations.
“The attack is ongoing, and several enemy drones are still in the airspace,” the air force adds, advising those in areas under air raid warnings to follow safety procedures.
According to its preliminary data, 108 drones used in the attack were shot down across the south and east of the country.
EU leaders agreed overnight to provide a €90bn (£79bn) interest-free loan to Ukraine to meet its military and economic needs for the next two years.
However, the bloc failed to bridge differences with Belgium that would have allowed the use of frozen Russian assets to raise the funds.
With the government in Kyiv on the verge of bankruptcy, the International Monetary Fund has estimated Ukraine will need €137bn (£120.7bn) in 2026 and 2027 to stay afloat.
Polish Prime Minister Donald Tusk warned before the talks that it would be a case of “either money today or blood tomorrow” to help Ukraine.
The EU’s plan had initially been to use some of the €210bn (£180.5bn) worth of Russian assets frozen in Europe, mostly in Belgium.
Leaders worked deep into the night to reassure Brussels that it would be protected from any Russian retaliation if it backed the plan, but as talks bogged down, it was decided to borrow the money on capital markets instead.
“We have a deal. Decision to provide 90 billion euros of support to Ukraine for 2026-27 approved. We committed, we delivered,” EU Council President Antonio Costa said in a post on social media.
Not all countries agreed to the loan package. Hungary, Slovakia and the Czech Republic refuse to support Ukraine and opposed it, but a deal was reached in which they did not block the package and were promised protection from any financial fallout.
French President Emmanuel Macron said the deal was a major advance, saying that borrowing on capital markets “was the most realistic and practical way” to fund Ukraine and its war efforts.
Volodymyr Zelenskyy has thanked EU leaders for the loan to Ukraine that was agreed overnight in Brussels.
The Ukrainian president said the deal ensured financial security for his country and said Russia’s assets in a Belgian clearing house must be kept frozen.
“It is important that Russian assets remain immobilized and that Ukraine has received a financial security guarantee for the coming years. Thank you for the result and for unity. Together, we are defending the future of our continent,” he said.
Volodymyr Zelenskyy had been hoping the EU would agree to use frozen Russian assets to help Ukraine.
We’re yet to hear from him since it became clear that wouldn’t be happening, with the bloc agreeing on a loan instead.
Here’s what we said yesterday, when asked what he would say to Belgian people to address their concerns around using frozen Russian assets:
“I would look at this question from the point of view of morality and justice.
“Of course Ukraine has the right for this money, because Russia is destroying us and to use these assets against their attacks is absolutely just.
“One can fear certain legal steps in court from the Russian Federation, but it’s not as scary as when Russia’s at your borders.
“So while Ukraine is defending Europe, you must help Ukraine.”
We’ve just had a rather predictable response from Russia to the EU’s announcement of a new funding package for Ukraine.
Kirill Dmitriev, who has been a key envoy for the Kremlin in recent negotiations with the Americans, has described EU leaders as “warmongers”.
He said “voices of reason” in the bloc – presumably the likes of Hungary and Slovakia – had been ignored.
Ursula von der Leyen, president of the European Commission, spoke to the media after the EU’s new loan for Ukraine was announced.
The €90bn interest-free loan will be funded by borrowing, she said, backed up by headroom in the bloc’s budget and an agreement to amend its so-called “multiannual financial framework”.
That’s how the EU sets its longer-term budgets and spending plans.
“Ukraine would only need to pay back the loan once it receives reparations,” she explained.
“Until then, the immobilised Russian assets will remain immobilised and the union reserves its right to make use of the cash balances to finance the loan.”
The loan will cover Ukraine for the next two years, she said.
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