EU Likely to Extend Ukraine Loan Support

Brussels The European Union will probably need to provide Ukraine with another loan to help cover its budget shortfall in 2027 and sustain its defence against Russia’s invasion, Estonian Prime Minister Kristen Michal said on Friday. Speaking ahead of the second day of an EU summit in Brussels, Michal stressed that continued European financial assistance would remain essential as Kyiv faces mounting spending requirements. He said the bloc would likely use another loan, following the mechanism adopted for previous financial support. “European financial assistance has to be there,” Michal said, describing financial support as critical during a prolonged war of attrition. He added that the responsibility for maintaining such assistance rested with the European Union. EU leaders agreed in December last year to provide Ukraine with a €90 billion loan to cover a substantial portion of its financial requirements for 2026 and 2027. However, Kyiv has since indicated that it faces a funding gap exceeding $70 billion next year, covering both defence expenditure and regular government spending. The financing challenge has revived discussions about how European countries can maintain assistance while managing their own budgetary commitments. Several governments have advocated using Russian assets frozen within the EU to finance support for Ukraine. However, the proposal has faced opposition from Belgium, where most of the frozen assets are held, and several other member states. Michal said another EU loan appeared to be the most likely option. He expressed hope that European leaders would agree on additional funding for 2027 before the end of this year, ahead of elections scheduled in several European countries.