Europe Approves 90 Billion Euro Interest-Free Loan to Ukraine

Latest Developments

• Funding for Defense and Budget Expenses: The European Union gave final approval to a 90-billion-euro loan for Ukraine on April 23 after Hungary lifted its two-month veto. The interest-free loan would be used to help “cover two-thirds of Ukraine’s needs for the next two years,” Reuters reported. According to the European Union, 60 billion euros will be allocated toward defense spending, while 30 billion euros will fund Ukraine’s other budgetary needs. Ukraine would only be required to repay the loan “once it receives war reparations from Russia.”
• Loan Approved After Hungary Lifts Veto: Hungary lifted its veto after Hungarian Prime Minister Viktor Orban was defeated in the country’s April 13 election by incoming premier Peter Magyar, who has promised to rebuild Hungary’s ties to Brussels and NATO. This followed Kyiv’s announcement that it had repaired the Druzhba pipeline, which carried Russian oil to Hungary through Ukraine. The loan is contingent on Ukraine continuing democratic reforms and fighting corruption.
• Zelenskyy States Loan Strengthens Resilience: Ukrainian President Volodymyr Zelenskyy welcomed the decision, stating, “This package will strengthen our army, make Ukraine more resilient, and enable us to fulfill our social obligations to Ukrainians, as set out in law.” He added, “We are working to ensure that the first tranche from this support package becomes available as early as May-June.”

FDD Expert Response

“Failing to supply these funds would have had disastrous implications for Ukraine’s war effort, hardening the Kremlin’s intransigence in peace talks. Kudos to the Europeans for stepping up. One hopes this episode will remind Washington who its real friends are in Europe.” — John Hardie, Russia Program Deputy Director

“The loan deal is a significant victory for Ukraine and turns the page on the European Union’s worst internal standoff in years. Unfortunately, the source of the problem remains: Europe’s overreliance on Russian energy. Europeans continue to fund both sides of the war in Ukraine through their oil and gas payments to Moscow and this welcome economic lifeline to Kyiv. The Kremlin will continue to use energy as a political and economic weapon against Europe.” — Peter Doran, Adjunct Senior Fellow

“Brussels has sent a strong signal to Washington that Ukraine is not just a distant conflict but a European responsibility as well. However, Ukraine is also an American concern, as Russia, China, and Iran increasingly coordinate to challenge U.S. interests. The weakening of Russia’s influence in the European Union as a result of the political changes in Hungary means that the United States can now rely more on Europe to support Ukraine.” — Ivana Stradner, Research Fellow

FDD Background and Analysis

“The Iran War’s Five Lessons for Europe,” by Peter Doran and RADM (Ret.) Mark Montgomery

“Orban’s ouster was a win. But don’t let Hungary distract from Russia’s next target,” by Reagan Easter and Ivana Stradner

“Americans shouldn’t cry for Orban,” by Ivana Stradner and Peter Doran

“Center-Right Party’s Overwhelming Victory in Hungarian Election Could Boost EU Support for Ukraine,” by Ivana Stradner