EU leaders have agreed to lend Ukraine 90 billion euros after plans to use Russian assets were revealed.

BRUSSELS (AP) — European Union leaders on Friday agreed to provide Ukraine with a huge interest-free loan for the next two years to meet its military and economic needs, but they failed to resolve differences with Belgium that would have allowed them to use frozen Russian assets.

After nearly four years of war, the International Monetary Fund estimates that Ukraine will need 137 billion euros ($161 billion) in 2026 and 2027. The government in Kiev is on the brink of bankruptcy, and desperately needs money by spring.

The plan was to use some of the 210 billion euros ($246 billion) of Russian assets that have been frozen in Europe, mostly in Belgium.

Leaders worked hard on Thursday night to reassure Belgium that they would be spared any Russian retaliation if it supported a “compensation loan” plan, but in the end the leaders did not exercise that option, but after negotiations stalled, the leaders eventually opted to borrow money on the capital market.

“We have an agreement. The decision to give Ukraine 90 billion euros ($106 billion) in aid for 2026-27 has been approved. We have committed,” EU Council President Antonio Costa said in a post on social media.

Not all countries agree on the debt package. Hungary, Slovakia and the Czech Republic refused to support Ukraine and opposed it, but reached an agreement in which they did not block the package and promised protection from any economic consequences.

“I don’t want a European Union at war,” said Hungarian Prime Minister Viktor Orbán, a close ally of Russian President Vladimir Putin in Europe and a self-described peacemaker.

“Giving money is war.” Orban said. He also described the rejected plan to use frozen Russian assets as a “dead end.”

French President Emmanuel Macron called the deal a major step forward, saying borrowing on the capital markets was the “most realistic and practical way” to fund Ukraine and its war effort.

German Chancellor Friedrich Merz also welcomed the decision.

“The financial package for Ukraine has been finalized,” Merz said in a statement, adding that “a zero-interest loan has been granted to Ukraine.”

“These funds are sufficient to meet Ukraine’s military and budgetary needs for the next two years,” Merz added. He said the frozen assets will remain frozen until Russia pays Ukraine war reparations. Ukrainian President Volodymyr Zelensky has said that it will cost more than 600 billion euros ($700 billion).

“If Russia does not pay reparations we will – in full accordance with international law – use Russian real estate to repay the debt,” Merz said.

Zelensky, who traveled to Brussels for the summit amid fiery protests by angry farmers over a proposed trade deal with five South American countries, appealed for a swift decision to continue Ukraine in the new year.

Polish Prime Minister Donald Tusk warned on Thursday morning that it would be a case of sending “money today or blood tomorrow” to help Ukraine.

Plans to use frozen Russian assets Belgian Prime Minister Bart de Wevre rejected the legally risky plan and warned it could damage the business of Euroclear, the Brussels-based financial clearing house that holds 193 billion euros ($226 billion) in frozen assets.

Belgium collapsed last Friday when Russia’s central bank sued Euroclear to stop it from providing any loans using its money to Ukraine, which has been frozen under EU sanctions on Moscow since it launched a full-scale war in 2022.

“For me, the compensation loan was not a good idea,” De Wever told reporters after the meeting. “When we reinterpreted the text, there were a lot of questions about I said, I told you, I told you. There are a lot of loose ends. And if you start pulling loose ends on the strings, things fall apart.”

“We avoided entering a precedent that undermined global legal certainty. We preserved the principle that Europe respects the law, even when it’s difficult, even when we’re under pressure,” he said. “The EU has given a strong political signal. Europe stands behind Ukraine.”

Still, Costa said the EU “reserves the right to use real estate to pay this debt.”