IMF Welcomes EU’s €90 Billion Loan to Ukraine, Says More Funding Efforts Needed
GeokHub
Contributing Writer
NEW YORK/LONDON — Dec 19, 2025 The International Monetary Fund on Friday welcomed the European Union’s decision to lend Ukraine €90 billion ($105 billion) over the next two years, calling the move an important step toward stabilising the war-hit country’s finances.
“This is an important milestone towards closing financing gaps and restoring debt sustainability,” an IMF spokesperson said in an emailed statement.
EU Loan Seen as Critical Support
Earlier on Friday, EU leaders agreed to borrow funds on capital markets to provide Ukraine with interest-free loans for 2026 and 2027, opting not to finance the support using frozen Russian sovereign assets.
The funding is expected to cover around two-thirds of Ukraine’s estimated financing needs over the two-year period, as the country remains heavily dependent on foreign assistance following Russia’s full-scale invasion in 2022.
European backing is a key component of the IMF’s assessment that Ukraine’s debt remains sustainable — a central requirement for continued IMF lending.
IMF Programme Still Pending Approval
Ukraine and the IMF reached a preliminary agreement in late November on a new $8.1 billion lending programme, which still requires approval by the Fund’s Executive Board.
Before the board can consider the programme, Kyiv must complete several prior actions, including adopting a budget aligned with IMF targets, broadening its tax base, advancing anti-corruption reforms, and securing firm financing assurances from international donors.
No date has yet been set for the board’s review.
Funding Gap Remains
The IMF estimates Ukraine will require approximately €135 billion ($159 billion) in external financing for 2026 and 2027, highlighting the need for continued international support beyond the EU package.
IMF officials said discussions with donors are ongoing to secure the remaining funding commitments.
Ukraine’s Finance Minister Sergii Marchenko told G7 leaders on Friday that work should continue on exploring a so-called “reparations loan,” referring to proposals linked to Russian assets.
War Pressures Ukraine’s Finances
The ongoing war continues to strain Ukraine’s economy. Kyiv plans to allocate the majority of state revenues next year — about 2.8 trillion hryvnias, or roughly 27% of GDP — to defence spending.
IMF officials reiterated that discussions in Europe on how to support Ukraine, including debates over Russian assets, are welcome as long as they align with efforts to restore long-term debt sustainability.
