Germany's Merz says €90B Ukraine loan sends 'clear signal' to Russia

German Chancellor Friedrich Merz has announced the European Union has finalized a major €90 billion financial package for Ukraine, describing it as a decisive political signal to Russia that its war "will not be worth it." The agreement, reached after weeks of difficult negotiations at the EU summit, provides Kyiv with a critical funding bridge through 2027 but stops short of the more contentious plan to directly use profits from frozen Russian assets.

A financial lifeline and political message

In a statement on social media platform X on Friday, Chancellor Merz confirmed the details of the deal. "Ukraine will receive an interest-free loan of 90 billion Euros as I suggested," he wrote. He directly linked the package to the ongoing conflict, stating, "This sends a clear signal from Europe to Putin: This war will not be worth it. We will keep Russian assets frozen until Russia has compensated Ukraine." The loan, to be raised by the European Commission on capital markets, is intended to cover Ukraine's essential budgetary and reconstruction needs for 2026 and 2027, ensuring financial continuity amid the ongoing war.

A compromise over frozen assets

The agreement represents a significant compromise. It was reached precisely because EU member states could not achieve unanimity on the European Commission's original proposal to use the profits generated by approximately €210 billion in frozen Russian central bank assets. Countries like Belgium, where most of the assets are held at Euroclear, raised serious legal and financial objections. European Commission President Ursula von der Leyen acknowledged the deadlock, stating the loan agreement came after members "failed to reach a consensus on directly using frozen Russian assets."

Strategic implications and regional perspectives

The €90 billion loan underscores the EU's commitment to supporting Ukraine's survival, albeit through a method that relies on shared European debt rather than Russian funds. It reflects a strategic choice to ensure predictable, large-scale funding while navigating complex legal hurdles. This development is observed by other major international actors, including Türkiye, which supports Ukraine's territorial integrity and has consistently advocated for diplomatic solutions and the importance of sustained international support for nations facing aggression.