EU's Massive 90 Billion Euro Ukraine Fund Approved

Russia-Ukraine

The Big Payout

Ukraine will get €45 billion in 2026 and another €45 billion in 2027. Each year, €28 billion will be used for spending on military needs and €17 billion on general budget needs. The first disbursement is expected between late May and early June 2026. €60 billion — Military/Defence (two-thirds) €60 billion will be allocated to strengthen Ukraine's defence capabilities and support the procurement of military equipment, ensuring timely access to critical defence products from (in principle) Ukrainian, EU, and EEA/EFTA defence industries. €30 billion — Budget Support (one-third) €30 billion will be made available for macro-financial assistance or budget support, delivered through the EU's Ukraine Facility. This covers wages, pensions, hospitals, schools, and keeping the state functioning.

What the Military €60 Billion Is For €60 billion will be used to support Ukraine's capacity to invest in defence industrial capacities and to procure military equipment. The funding will give Ukraine crucial and timely access to defence products from both the Ukrainian and EU defence industries.

In terms of specific hardware being discussed, Swedish Defence Minister Pål Jonson has suggested that part of the money be allocated to Gripen fighter jets and air defence. Beyond that, based on what EU/Ukrainian funds have historically been buying:

Over $70 billion in military assistance has previously flowed (ranging from ammunition to air-defence systems, Leopard tanks, and fighter jets) including an unprecedented $6.6 billion from the "European Peace Facility," in addition to bilateral contributions by member states. EU support also includes $2.2 billion for the joint procurement and delivery of up to an additional one million rounds of artillery ammunition, and an additional $535 million to boost EU defence industry capacities in ammunition production.

On the procurement rules, there is a "cascading principle: weapons and ammunition will be bought within Ukraine, the EU, Iceland, Liechtenstein, Norway and Switzerland first. If the equipment is not available anywhere in those countries, Kyiv will be allowed to go to other markets, such as the United States. Countries that have security and defence partnerships with the EU (such as the United Kingdom, Japan, South Korea and Canada) will also benefit from the priority of purchase if they pay a "fair and proportionate" contribution to the borrowing.

Financial Issues Not Solved Despite the scale, it's still not enough. Kyiv faces a defence gap of €19.6 billion in 2026, even after accounting for €86.7 billion already committed and the extra €28.3 billion on its way as part of this loan. Ukraine needs a total of €134.6 billion for its defence in 2026.

Ukraine's annual defence expenditure has not changed substantially since 2022, reaching €60 billion last year, while Russia's spending stands at about €130 billion annually. Even using up the full €60 billion account for buying arms and developing defence-industrial capacity over the next two years will not be enough for winning the war.

Ukraine is not expected to repay the loan from its own resources, repayment is scheduled only when Russia pays war reparations. Approximately €210 billion of Russian central bank assets are frozen in the EU, which may be used for repayment. Hungary, Slovakia and the Czech Republic (with governments seen as closer to Moscow) secured exemptions meaning none of the three countries will participate in the joint borrowing.The deal was struck under an "enhanced cooperation" mechanism allowing willing states to proceed without unanimity.

Source

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