EU Agrees on $105 Billion Deal for Ukraine Funding Without Using Russian Assets

The European Union has agreed on a $105 billion agreement to fund Ukraine in their war against Russia without using frozen Russian assets in Belgium.

The agreement will see the EU take a massive loan off of their budget, helping to fund Ukraine for the next two years– Ukraine was originally expected to run out of funding by early 2026, but they can now last against Russia through 2027 if needed.

The deal comes after several EU leaders, like German Chancellor Friedrich Merz and the head of the European Commission, Ursula von der Leyen, proposed a plan to utilize frozen Russian assets in Belgium to fund Ukraine. Due to the war, over €210 billion ($244 billion) in Russian assets remain frozen in Belgium, and their plan attempted to take a loan from these assets.

However, Belgium and several others strongly opposed the plan, as it depended on Russia to pay reparations to Ukraine, which would pay back the EU. Due to the unlikeliness of Ukraine receiving reparations from Russia, the EU decided to draft an alternative plan to loan off of their budget.

While the plan will cost more for the EU in the long run, members believe it to be a major win for both Ukraine and the EU as a whole. Ukraine had been struggling for funding, allowing Russia to ramp up operations and increase leverage during ceasefire negotiations. Meanwhile, the United States had shut the European Union out of Putin-Zelenskyy talks.

Nevertheless, the new deal solves both problems, re-strengthening Ukraine, providing them with additional funding for future efforts, and discouraging Russia from continuing the war while re-establishing the EU as a major power in negotiations between the two countries. Additionally, Belgium has frozen Russia's assets until further notice, allowing them to keep the initial loan plan in their back pocket.

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Image credit to Reuters