EU formally approves 90bn euro Ukraine loan and new sanctions on Russia

The European Union has given final approval to a 90-billion-euro ($105bn) loan for Ukraine and a new round of sanctions on Russia, in a boost for Kyiv after a prolonged row.

The measures were signed off after Hungary and Slovakia dropped objections when Ukraine restarted oil flows following repairs to the damaged Druzhba pipeline.

“Deadlock over,” EU foreign policy chief Kaja Kallas posted online. “Russia’s war economy is under growing strain, while Ukraine is getting a major boost.”

The row has held up EU support for Ukraine at a time when the United States has largely cut Kyiv off and eased sanctions on Russian oil exports amid the US-Israeli war on Iran.

Hungary’s outgoing Prime Minister Viktor Orban – who suffered a crushing election defeat this month – stalled the loan as leverage to pressure Ukraine to fix the pipeline carrying Russian oil to his landlocked country.

The green light means that Brussels should, in the coming months, be able to start paying out the funds that Kyiv badly needs to plug budget black holes four years into Russia’s invasion.

Ukrainian President Volodymyr Zelenskyy welcomed the EU’s approval of the loan.

“Today is an important day for our defence and for our relations with the European Union. The European support loan for Ukraine has been unblocked – 90 billion [euros or $105bn] over two years,” Zelenskyy said on X.

“It matters that Ukraine is securing this level of financial certainty – after more than four years of full-scale war,” he added, urging that the first tranche be disbursed by May or June.

New Russia sanctions

At the same time, the EU’s 27 countries also signed off on a new package of sanctions against Moscow that had been held up by both Hungary and Slovakia over the same row.

The new round of economic punishment for the Kremlin – the 20th by the EU since Russia launched its full-scale invasion of Ukraine in 2022 – targets Russia’s energy, banking and trade sectors.

The measures included clamping down further on the so-called “shadow fleet” of ageing tankers that Moscow uses to skirt oil-export restrictions, and curbs on Russian cryptocurrency traders.

But the EU stopped short of imposing a full maritime service ban for vessels carrying Russian crude, saying it hoped to get Group of Seven (G7) partner nations to go ahead together on it at a later date.

The bloc also announced it was stopping sales of certain machinery to the Central Asian nation Kyrgyzstan to prevent the products from going to Russia.

That marks the first time the EU has used a mechanism to halt entire categories of exports to a specific country to avoid sanctions circumvention.