Europe has finally closed an agreement to guarantee financing for Ukraine for the next two years through a loan of 90,000 million of euros backed by the common budget of the Union, a decision taken after more than 16 hours of negotiations in Brussels and under explicit pressure to avoid a financial collapse of kyiv at the beginning of 2026.
In the background, a crystal clear idea: Russia has imposed its “vote”.
The lifeguard and a pulse. The pact comes at a particularly delicate moment, with the United States and Russia advancing conversations parallels about a possible end to the war and with Trump publicly urging Ukraine to accept a quick agreement.
For European leaders, the loan is not just an economic instrument, but a way to reaffirm that the EU wants and needs to have its own voice in any outcome of the most serious conflict experienced on the continent in the last eight decades. The political message is clear: Europe cannot stand by while others decide the future of Ukraine and, by extension, its own security.
The failure of the ideal plan. For months, Brussels’ preferred option was to use the fences of 210,000 million euros in Russian sovereign assets frozen in Europe as collateral for a large “reparations” loan for Ukraine, a formula that made it possible to finance the war effort and the functioning of the Ukrainian state without directly resorting to European taxpayers’ money.
The idea was powerful, both economically as symbolically: that Russia would pay, at least indirectly, for the destruction caused by its invasion. However, the plan fell apart at the last moment, a victim of the legal, financial and political risks involved in touching that capital, above all and as we told yesterdayfor a handful of countries. Russia, in fact, has already initiated legal action denouncing an illegal confiscation, and fear of economic or judicial reprisals grew as the decisive summit approached.
Bucha and the passing of the war
A pragmatic agreement. Faced with the impossibility of closing ranks around the use of frozen assets, France and Italy led a more pragmatic alternative: use the common EU budget to issue debt on the markets and channel the funds to Ukraine. The result is a two year loan which guarantees immediate liquidity to kyiv, although it is more expensive and less scalable than the original option.
To achieve consensus, a complex political architecture was also accepted: Hungary, Slovakia and the Czech Republic will not assume obligations direct financial measures, a key condition to avoid an internal blockage. Still, the agreement was presented as a minimal but necessary victory. Ukraine gets the money it needs to survive and Europe avoids a picture of total paralysis at a critical moment.
The resilience narrative. From kyiv, Zelenskiy celebrated the agreement as a real reinforcement of Ukrainian resilience, underscoring both the arrival of funds and the fact that Russian assets remain tied up. For the Ukrainian president, the combination it is essential: short-term financial security and sustained strategic pressure on Moscow.
Zelenskiy had defended the use of frozen assets until the last moment, appealing to moral, legal and historical justice criteria, but he accepted the compromise. like a lesser evil facing the existential risk of running out of resources. The EU, for its part, insists that Ukraine will only have to repay the loan when Russia pays reparationsa formula that keeps the narrative of Russian responsibility alive without yet crossing the line of direct confiscation.
Belgium and type C accounts. It we explained yesterday. In the background of the agreement there was a key actor: Belgium. Most of the Russian money frozen in Europe is there, guarded through critical financial infrastructure like Euroclear and linked to mechanisms such as called type C accountsdesigned precisely to immobilize assets without transferring ownership. Brussels demanded “unlimited” guarantees against possible Russian demands and retaliation, a level of protection that the rest of the partners were not willing to assume.
The final result, although presented as a European commitment, essentially coincides with what was best for Moscow: that its sovereign capital not be confiscated or used as direct collateral. Russia loses access to the money, but retains the fundamental principle that these funds remain formally its own, avoiding a far-reaching legal precedent. If you also want, indirectly, Europe has chosen the safest path for itself and, at the same time, the least disruptive for the Kremlin.
Europe and its limitations. So things are, the agreement leaves an ambivalent feeling. On the one hand, it shows that the EU is capable of mobilizing massive resources to support Ukraine and prevent its financial collapse in the middle of the war. On the other hand, it exposes again structural limitations of the European project when it comes to quick and risky decisions in foreign policy and security.
The plan based on Russian assets promised to be more forceful and transformative, and the loan backed by the common budget is more conservativeslower and more politically comfortable. In a context in which Washington presses for an agreement and Russia hopes to buy time, Europe has chosen legal stability and internal cohesion over a direct financial confrontation with Moscow. Ukraine thus receives the oxygen it needs.
The strategic pulse, however, is far from resolved.
Image | RawPixel
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