A few days ago, Ukraine managed to secure $105 billion, interest-free loan (some reports say $106 billion) from Europe.
European Union leaders agreed on Friday to provide a massive interest-free loan to Ukraine to meet its military and economic needs for the next two years.
The 27-nation bloc’s heads of state had planned to use some of the 210 billion euros ($246 billion) worth of Russian assets that are frozen in Europe, mostly in Belgium. But despite working through the night into Friday morning, they failed to convince Belgium that the country would be protected from any Russian retaliation if it backed the “reparations loan” plan.
They settled on an alternative: borrowing $106 billion on capital markets.
After almost four years of war, the International Monetary Fund estimates that Ukraine will need 137 billion euros ($161 billion) in 2026 and 2027.
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The European Council said it would use Article 20 of the Treaty of Europe to allow the EU to shoulder debt for a zero-interest loan to Ukraine.
It’s a simpler and possibly safer solution compared to the reparations loans. It is also akin to how the EU took on 750 billion euro in debt in the wake of the COVID-19 pandemic for a gigantic economic recovery fund. Large borrowing has become a hallmark of the administration of von der Leyen.
Not all countries agreed to the loan package. Hungary, Slovakia and the Czech Republic refused to take on debt for Ukraine, but a deal was reached in which they did not block the loan package and were promised protection from any financial fallout.
Paul Warburg thinks that this loan will actually let Ukraine survive 5-7 years. This follows up his video on how Ukraine is winning the war of attrition, comparing Russia’s situation to Germany in World War I and the Soviet Union’s defeat in Afghanistan.
Russia’s economy was already showing visible cracks before Ukraine started hitting its oil exporting infrastructure, and the EU’s latest loan may well allow Ukraine to continue fighting until Russia’s economy collapses from the strain of continuing its illegal war of territorial aggression.

