The European Union has begun releasing its €90 billion loan to Ukraine, with the first payments due to reach Kyiv in mid-June as Russia’s invasion grinds into its fifth year.
The European Commission, which manages the scheme, has said the opening tranche would total about €9.1 billion. Of that, €5.9 billion is earmarked for defence and €3.2 billion for budget support, Commission spokesperson Balázs Ujvári said.
The loan was agreed by EU leaders in December 2025 and finalised in April, after Hungary lifted a two-month veto. It is to be split evenly across 2026 and 2027, with €60 billion of the total reserved for defence and the remainder propping up Ukraine’s national budget.
How and where the money is spent has been closely guarded by Kyiv. Ukrainian President Volodymyr Zelenskyy has said the defence portion would fund arms production and weapons bought from partners when they cannot be made in Ukraine.
When the loan was designed, several member states pressed for the cash to be spent inside Europe, arguing that European money should build European capacity. France was among the loudest, according to Luigi Scazzieri of the EU Institute for Security Studies.
The rulebook sets a tiered order of preference, with purchases drawn first from Ukraine, the EU or the EEA-EFTA states. Only where no European option exists can Kyiv turn to 12 security-pact partners such as the United Kingdom and Canada, or, in justified cases, further afield.
The difficulty is that Europe cannot yet build fast enough. One EU diplomat said Patriot air-defence stocks were exhausted until 2029, while orders for the rival Franco-Italian SAMP/T system were not materialising because the production capacity did not exist.
Andrius Kubilius, the bloc’s first European Commissioner for Defence and Space, has argued that Europe should make weapons that are “good enough” rather than “haute couture”, favouring cheaper, scalable arms over systems perfected over years.
The opening defence payment is expected to buy Ukrainian drones — by one estimate from the German Marshall Fund, around three million of them at €2,000 each. A March order already required a Commission waiver because some drone parts, thought to be Chinese-made microchips, are not produced in the EU or Ukraine.
Guntram Wolff of the European Policy Centre said the moment should be used to shift orders towards domestic firms. “It’s high time that we start buying from these domestic suppliers,” he said.
