European Commission President Ursula von der Leyen, left, talks with Cyprus' President Nikos Christodoulides as she leaves after a meeting at the presidential palace in Nicosia, Cyprus, Wednesday, Jan. 7, 2026. (AP Photo/Petros Karadjias, Pool)
TSBRUSSELS (AP) — The European Union will dedicate most of a massive new loan program to Ukraine’s military needs over the next two years while also injecting billions into its war-ravaged economy, European Commission President Ursula von der Leyen said Wednesday.
EU last month to loan Ukraine 90 billion euros ($105 billion) to help cover its needs in 2026 and 2027. Kyiv would only have to pay the money back once Russia ends its war and pays for the damage it has inflicted over almost four years.
The International Monetary Fund estimates that Ukraine will need 137 billion euros ($160 billion) over the two years. The government in Kyiv is on the verge of bankruptcy and desperately needs the money by spring.
The bloc hopes that other countries like Britain, Canada, Japan and Norway will help make up the difference. The IMF is preparing a new multi-billion dollar Ukraine loan and is expected to endorse it next month.
“We all want peace for Ukraine, and for that Ukraine must be in a position of strength,” von der Leyen said as she explained the commission's spending plans. She said 60 billion euros ($70 billion) would be for military support, and 30 billion euros ($35 billion) for budget aid.
“With the military assistance, Ukraine can stand strong against Russia, and at the same time it can integrate more closely into Europe’s defense industrial base,” von der Leyen told reporters.
The commission wants the loan money to start flowing in by April, but EU member countries and the European Parliament must endorse the spending plan before it can enter force.
The military tranche would be used to buy equipment from Ukraine, EU countries and others in Europe’s economic area, like Norway. “It might also occasionally be possible to acquire the equipment outside,” if it’s more effective to do so, von der Leyen said.
In some circumstances, some of the money could be used under a for European allies and Canada to buy arms and equipment from the United States and donate them to Ukraine, officials said.
Von der Leyen insisted that Ukraine must undertake pro-democracy reforms to secure the loans, including in the rule of law and the fight against corruption. “These conditions are non-negotiable for any financial support,” she said.
Ukraine has been mired in corruption for decades, and on President last year following the resignation of his powerful chief of staff, Andrii Yermak, after his residence was searched by investigators.
Yermak was also Ukraine’s lead negotiator in to end the war.
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