EU leaders have approved a €90 billion loan for Ukraine and a 20th package of sanctions against Russia after Hungary lifted its veto, ending weeks of delay over measures designed by the bloc’s top officials and paid for, ultimately, by everyone else. The European Commission president, Ursula von der Leyen, celebrated the deal on social media, saying, “We are on our way to Cyprus with good news.” She welcomed both agreements and said, “While Russia doubles down on its aggression, we are doubling down on our support to the brave Ukrainian nation, enabling Ukraine to defend itself and putting pressure on Russia’s war economy.”
Who Decides, Who Pays
The loan is funded by EU borrowing, with the intention that Russian reparations will fund repayments. The package is expected to provide two-thirds of Ukraine’s financial needs in 2026 and 2027. Von der Leyen later said she thought it would be possible to disburse the first tranche of the €45 billion funding planned for 2026 in this quarter, meaning by the end of June. She said the first payment would fund Ukraine’s domestic drone production, describing it as “drones from Ukraine for Ukraine.”
That is the shape of the arrangement: the institutions borrow, the war continues, and the repayment fantasy is pushed onto future reparations that are not in hand. The people living through the consequences are not the ones making the decisions in the summit rooms.
The latest sanctions against Russia blacklist Russian banks and energy companies, as well as entities in the United Arab Emirates, Thailand and China, including Hong Kong, for helping Moscow evade western restrictions. The package also includes a ban on the export of hi-tech machine tools and telecoms equipment to Kyrgyzstan, which the EU says has shown “systematic and persistent” failure to prevent their re-export to Russia, where they are used to make missiles and drones. The former Soviet republic has previously said it is working to comply with western sanctions.
The Machinery of Pressure
Hungary lifted its vetoes over the long-delayed loan and sanctions after a dispute over a damaged oil pipeline that traverses Ukraine came to an end. Russian oil deliveries to Hungary and Slovakia resumed on Thursday, the Hungarian energy group MOL reported, after both countries, heavily dependent on Russian crude, dropped their objections to EU support for Ukraine. The Druzhba oil pipeline was repaired, and the dispute was resolved sufficiently to allow the approval to proceed.
Viktor Orbán, the Hungarian prime minister who was defeated by his Conservative rival, Péter Magyar, earlier this month, will not take part in what would have been his final EU summit. Zelenskyy joined other leaders in the Cypriot resort of Ayia Napa for talks over dinner. He wrote on social media that “It matters that Ukraine is securing this level of financial certainty,” and said spending priorities included arms production, “the procurement of necessary weapons from partners that do not yet produce in Ukraine,” and preparing the energy sector for next winter, in response to Russia’s attacks on Ukraine’s energy infrastructure in recent months.
Zelenskyy told reporters that he wished the incoming Hungarian government all the best, while questioning Orbán’s approach to Ukraine. “Our people need to have strong, warm, good relations,” he said, referring to the two countries. “You are neighbours. You have to live in peace.” He added that his team was already in touch with its Hungarian counterparts.
Borders, Blocs, and the Next Round of Control
Welcoming the agreements, the European Council’s president, António Costa, said “the next step is to open the first cluster of negotiations for the Ukrainian accession to the European Union.” Hungary has also been blocking the opening of clusters of negotiating topics that would allow Ukraine to make progress on its application to join the EU. While other member states support the start of talks, many are wary of any fast-track procedure for Kyiv, which filed its application for EU membership a few days after the full-scale Russian invasion.
EU leaders are also expected to discuss how to respond to surging energy prices and the wider ramifications of war in the Middle East. The European Commission warned on Wednesday of the EU’s “dangerous dependency on fossil fuels” as it said the bloc had paid an additional €24 billion in oil and gas imports since the outbreak of the Middle East conflict in February. EU leaders are expected to discuss ideas to respond to a rise in energy prices, including a proposed cut to electricity taxes and incentives to accelerate the shift to green energy. Despite a boost to wind and solar power since the energy crisis of 2022, the EU has been slower to scale down the use of oil and gas in other parts of the economy, such as transport and housing.
Cyprus president Nikos Christodoulides has called for a discussion on how to “give substance” to the EU’s mutual assistance clause. Article 42.7 of the EU treaty obliges member states to provide “aid and assistance by all the means in their power” to a fellow member that is a victim of armed aggression on its territory. Cyprus, which is not a member of Nato, wants the EU to take that clause more seriously after a drone hit a British base on the island in March. The clause has only been activated once, by France after the Paris terrorist attacks of 2015, but many officials are unsure how it works in practice. Other member states want to ensure talks about the pact do not undermine Nato’s mutual defence clause, article 5, at a time when Trump complains frequently about the value of the transatlantic alliance. Gitanas Nausėda, president of Lithuania, a Nato member, said: “For me it is an absolutely crucial thing that article 5 is absolutely key to our defence and security and it will remain so.”