EU Commission moves forward with Ukraine $104B loan plan as political deadlock persists

BRUSSELS

The European Commission on Wednesday moved ahead with preparations for a €90 billion ($104 billion) loan package to support Ukraine despite a continuing political deadlock among member states that has blocked full implementation.

The Commission adopted measures to mobilize part of the funding for 2026 and accelerate defense procurement, with a particular focus on drone production, even as approval of the overall package remains stalled.

European Commission President Ursula von der Leyen said the bloc is pressing forward with the initiative despite delays.

"We will deliver on the €90 billion loan to Ukraine. Today, we are taking the necessary preparatory steps to mobilize this year's budget and procure defense equipment, with a focus on Ukraine's cutting-edge drone industry. With this we send a clear message: the Commission stands ready to move forward," she said in a statement.

Following a positive assessment of Ukraine’s financing strategy, the Commission proposed allocating €45 billion by the end of 2026 as part of the broader loan package.

The funding includes up to €16.7 billion in budget support through EU financial instruments and €28.3 billion aimed at strengthening Ukraine’s defense industrial capacity.

In parallel, the Commission approved the use of procurement derogations to fast-track drone acquisitions, citing Ukraine’s urgent wartime needs.

Further defense procurement plans covering missiles and ammunition are expected to follow.

Despite these steps, the full €90 billion package remains blocked by Hungary, creating a political impasse within the bloc.

Hungarian Prime Minister Viktor Orban has tied his country’s approval to the restoration of Russian oil transit through the Druzhba pipeline.

Budapest claims Ukraine deliberately halted the flow, while Kyiv says the disruption followed damage caused by a Russian strike and has rejected calls for inspections.

The Commission’s proposal will now be submitted to the EU Council, where member states must agree on the allocation of funds for 2026.

Once approved, the Commission will proceed with borrowing on financial markets and begin disbursements alongside launching procurement procedures.