The European Union formally approved a €90 billion loan to Ukraine on April 23, bringing to an end a months-long saga that had threatened to leave the Ukrainian authorities in a perilous financial situation. In parallel, EU officials also gave the green light to a new set of sanctions against Russia, underlining the bloc’s determination to oppose Moscow’s expansionist agenda.

News of the loan confirmation was welcomed by senior European Union officials. “Promised, delivered, implemented,” commented European Council President António Costa. “The EU’s strategy to achieve a just and lasting peace in Ukraine rests on two pillars: Strengthening Ukraine and increasing pressure on Russia. Today we moved forward on both.”

The decision to proceed with the EU loan comes just over a week after Hungarian Prime Minister Viktor Orbán was defeated in his country’s parliamentary elections following sixteen years in power. Orbán was widely seen as a Putin proxy and faced frequent accusations of unofficially representing Russian interests within the European Union. Following Orbán’s landmark loss, incoming Hungarian leader Péter Magyar confirmed his country would no longer obstruct the Ukraine loan.

The European Council first agreed to the €90 billion loan in December 2025, with Ukraine only obliged to begin repayments once Russia had paid war reparations. The decision was seen as a compromise option to maintain European support for Kyiv after EU member states were unable to agree on the seizure of frozen Russian assets.

Weeks after a deal was reached on the loan package, Orbán intervened to block further progress despite having already secured an opt-out for his country. The Hungarian politician accused Kyiv of holding back Russian oil deliveries to Hungary after a Russian bombardment damaged a pipeline running through Ukrainian territory. The Druzhba pipeline has resumed operations this week, removing a key obstacle to the loan.

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Confirmation of the EU loan is a big boost for Ukraine and a major setback for Russia. The funding will be split over the coming two years and is set cover a large portion of Ukraine’s defense spending, while also helping Kyiv to cover a budget gap that had threatened to create a crisis in the country’s domestic finances.

Much of the money will be used to secure military supplies from European partners, meaning the loan will also support the continent’s rearmament drive. Europe is currently undergoing a generational shift in defense strategy amid a rapidly changing geopolitical environment shaped by escalating Russian aggression and a US administration that is signaling plans to scale down its traditional commitment to European security.

Faced with this new reality, European leaders are now seeking to enhance their own defense industry capabilities and reverse decades of reliance on the United States. Meanwhile, they also aim to integrate Ukraine into the continent’s security architecture. The new loan package promises to advance both of these agendas.

Since the onset of Russia’s full-scale invasion more than four years ago, the Ukrainian military has undergone a dramatic transformation and is now recognized as indispensable for the future of European security. Today’s Ukraine boasts by far the largest fighting force in Europe and is widely recognized as a world leader in drone warfare. There is growing consensus in European capitals that supporting this rising military power is a strategic priority.

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Ukrainian President Volodymyr Zelenskyy hailed the EU loan decision as “an important day for our defense and for our relations with the European Union.” The Ukrainian leader stressed that the funding would provide Ukraine with a degree of financial stability for the coming two years, both on the battlefield and across the country. “This package will strengthen our army, make Ukraine more resilient, and enable us to fulfill our social obligations to Ukrainians. It matters that Ukraine is securing this level of financial certainty,” he noted.

The mood in Moscow was far more downbeat. Ever since the landslide defeat of key Kremlin ally Viktor Orbán, Russian officials had accepted that the EU loan would almost certainly be confirmed. Nevertheless, news of Kyiv’s new financial lifeline served to highlight Moscow’s diminishing ability to weaken and divide Europe from within.

This represents a significant blow to Putin’s invasion strategy. Ever since Russia’s initial blitzkrieg attack of February 2022 failed to seize Kyiv and topple the Ukrainian government, Putin’s plan has been to outlast the West and grind Ukraine down in a war of attrition. The 2024 election of US President Donald Trump and his subsequent decision to cut off most US aid to Ukraine bolstered Russian confidence and helped convince Putin that time was on his side. However, Europe has since stepped up its support for Ukraine and has replaced the United States as the main barrier to Russia’s imperial ambitions.

With the Ukrainian authorities now assured of comprehensive financial support until the end of 2027, Putin’s expectations of an imminent collapse in international backing for Kyiv will have to be revised. European leaders are hoping this can force a broader reassessment of an invasion that is imposing crippling costs on Russia while offering no clear pathway to victory. “We will provide Ukraine what it needs to hold its ground, until Putin understands his war leads nowhere,” commented the EU’s top diplomat Kaja Kallas.

Peter Dickinson is editor of the Atlantic Council’s UkraineAlert service.

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The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

The Eurasia Center’s mission is to enhance transatlantic cooperation in promoting stability, democratic values, and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia, and Central Asia in the East.

Image: Ukraine's President Volodymyr Zelenskyy poses for a family photo with European Union leaders at the start of an informal European leaders' summit in Ayia Napa, Cyprus. April 23, 2026. (REUTERS/Yves Herman)