EU agrees to unblock €90bn loan for Ukraine after Hungary lifts veto

Orbán had the power to block the loan even though he – like the similarly Moscow-friendly governments of Slovakia and the Czech Republic – secured exemptions meaning none of the three countries will contribute to the joint borrowing.

The EU will provide Ukraine with two interest-free loans of €45bn each in 2026 and 2027, with €28bn reserved for military spending and €17bn for general budget needs each year. The money will be borrowed on capital markets backed by the EU budget.

Economists have said Ukraine could start to run low on money by June without the EU loan. The bloc’s economic commissioner, Valdis Dombrovskis, said on Tuesday the first disbursement was likely to be made at the end of May or in early June.

Ukraine is not expected to pay the money back from its own funds, with the capital only due when Russia starts paying reparations once the war is over – potentially using the estimated €210bn of its central banks assets frozen in the EU.

The scheme was designed last year as a way of making use of the frozen Russian funds to help Ukraine without actually confiscating the cash, a move that Belgium and several other EU member states had rejected as legally hazardous.

According to a draft, the EU’s 20th sanctions package against Moscow includes further maritime and energy restrictions aimed at limiting Russia’s ability to export oil, as well as a financial sector crackdown and trade and industrial bans.

More than 40 additional ships are to be added to the 600-strong list of vessels banned from EU ports and a comprehensive ban is to be introduced on maritime services such as insurance, brokering and technical management linked to Russian oil transport.

About 120 individuals and entities including 20 Russian regional banks have been added to the sanctions list, with travel and transaction bans and asset freezes intended to complicate domestic and cross-border settlement for Russian businesses.

Crypto platforms and digital assets will also be targeted, as will third-country banks that facilitate trade in restricted military goods, and about €930m of goods, specific metals, chemicals, and critical minerals, have been added to import and export bans.

Separately, the German government said the German subsidiary of Russia’s state-owned oil company Rosneft had told it the flow of oil from Kazakhstan through the Druzhba pipeline to a refinery in eastern Germany would be halted from 1 May.

The PCK refinery near the Polish border, one of Germany’s largest, supplies much of the Berlin region with fuel, but the government’s spokesperson in Berlin, Stefan Kornelius, said that change would “not significantly restrict refinery operations”.