EU Leaders Finalise Deal for €140 Billion Ukraine Loan Secured on Russian Reserves. European support for Ukraine’s defence effort is poised for a major escalation on both the financial and military fronts. 

Frozen Assets to Fund Future:

European Union leaders are reportedly close to finalising a landmark plan to extend a massive €140 billion interest-free loan to Kyiv, secured by the frozen assets of the Russian central bank. 

Separately, the United Kingdom confirmed the extension of its world-leading training program for Ukrainian troops through to the end of 2026, reinforcing its long-term commitment to Kyiv’s security.

The dual announcements of financial and military support come at a crucial time, coinciding with intense diplomatic pressure on Kyiv to negotiate peace and following the recent, reportedly tense, meeting between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy.

The €140 Billion Reparation Loan

European leaders are increasingly confident that a proposal, put forward by the European Commission, can be agreed upon by the end of the year. 

The plan centers on providing Ukraine with an interest-free “reparation loan,” backed by the estimated €200 billion in Russian central bank deposits frozen in the EU, mostly held at the Euroclear finance agency in Belgium.

Mechanism and Confidence

 • Non-Confiscation Approach: 

A senior EU official stressed that the plan is not a direct “confiscation” of Russian assets. The funds themselves will remain frozen, but the loan will be issued on the basis that Russia will ultimately be liable to use these frozen assets to cover war reparations once the conflict ends.

 • G7 Guarantees: 

To address concerns, particularly from Belgium—the holder of the bulk of the assets—the scheme requires Group of Seven (G7) countries to collectively underwrite the debt. The UK is expected to contribute to these guarantees, demonstrating European solidarity.

 • Broad Support: 

EU foreign policy chief Kaja Kallas confirmed on Monday that there was “broad support” among member states for the loan, which French officials estimate could sustain Ukraine’s war effort for up to three years. 

The European Council is set to discuss a detailed legal proposal for the mechanism at a summit this week.

 • Political Motivation: 

The loan is seen by European leaders as a “powerful message to Moscow that it cannot outlast us”, providing a necessary financial lifeline as Ukraine faces a growing annual budget deficit.

UK Commits to Training to 2026 and Beyond

In a demonstration of the UK’s unwavering military commitment, the government announced the extension of Operation INTERFLEX—the UK-led international training programme for Ukrainian troops—to at least the end of 2026.

Independence Day Pledge

The extension was announced by Defence Secretary John Healey in August, coinciding with the celebration of Ukrainian Independence Day.

 • Scale of the Programme: 

Since its inception, Operation INTERFLEX, supported by 13 other nations, has trained more than 50,000 Ukrainian recruits on British soil.

 • Evolving Focus: 

The training curriculum has been adapted to meet Ukraine’s evolving military needs, shifting from initial five-week basic combat skills courses to extended seven-week programmes with a greater emphasis on leadership, command skills, and instructor training.

 • Deterrent for Peace: 

Defence Secretary Healey stated that the extension ensures Ukraine is in the “strongest possible position” as peace negotiations intensify and that the trained forces would act as the “strongest possible deterrent to secure that future peace.”

 • Continued UK Support: 

The commitment to long-term training complements the UK’s significant financial pledges, which include £4.5 billion in military support this year, and plans to supply over 100,000 drones to Ukraine in 2025.

The dual-track approach from Europe—bolstering Kyiv’s financial resilience through Russian frozen assets and its military capability through sustained British training—underscores the Western bloc’s determination to strengthen Ukraine’s position regardless of the evolving, and often unpredictable, diplomatic environment emanating from Washington.

Headline Points

 • EU Loan Deal Near: 

European leaders are close to approving a €140 billion interest-free loan to Ukraine, to be secured against Russia’s frozen central bank assets.

 • Reparation Security: 

The loan is framed as a “reparation loan” intended to cover Ukraine’s war costs, with Russia’s assets providing the financial guarantee.

 • UK Training Extended: 

The British-led Operation INTERFLEX for Ukrainian troops has been extended to at least the end of 2026.

 • Focus on Leadership: 

The training program is shifting its focus to include more advanced leadership and instructor training to support the long-term regeneration of Ukraine’s Armed Forces.

 • European Unity: 

The move reflects a unified European front to provide long-term financial stability to Kyiv, providing a counter-balance to American diplomatic pressure for territorial concessions.

 • Massive Scale: 

The UK’s program has already trained over 50,000 Ukrainian recruits, and the UK has pledged £4.5 billion in military support this year.