European Union leaders have greenlit a colossal loan for Ukraine, sidestepping a contentious plan to use frozen Russian assets to fund the aid. The €90 billion (approx. KES 13.6 trillion) deal, announced in the early hours of Friday, aims to secure Ukraine's military and economic needs for 2026-27.

This multi-trillion shilling decision not only shapes the future of Europe's largest conflict but also sends ripples through the global financial system. For Kenya, it raises crucial questions about the priorities of international aid and the stability of a connected world economy.

The agreement, confirmed by EU Council President Antonio Costa, came after intense late-night talks in Brussels. "We have a deal... We committed, we delivered," Costa announced on social media. The core of the debate was not whether to help Ukraine, but how. A proposal to use profits from some €210 billion in Russian central bank assets frozen in the EU met stiff resistance, particularly from Belgium, which holds the majority of the funds and feared legal and financial retaliation from Moscow.

A Safer Bet With Big Implications

Instead of seizing the assets, the 27-member bloc opted to borrow the funds jointly against the EU budget. This move, noted Belgian Prime Minister Bart De Wever, allowed the EU to remain united and avoid "chaos and division." The loan carries a critical condition: Ukrainian President Volodymyr Zelenskyy confirmed Ukraine would only have to repay it if Russia fails to pay war reparations.

The decision highlights the legal and diplomatic tightrope Western nations are walking. Using frozen sovereign assets is legally contentious, with many experts warning it could violate international law and set a dangerous precedent. Russian President Vladimir Putin had previously condemned such a plan as akin to "theft."

The View From Nairobi

While war in Europe may seem distant, the financial aftershocks are not. This KES 13.6 trillion commitment is a monumental figure. For perspective, the EU's development aid to Kenya between 2014 and 2020 was €435 million (approx. KES 65.8 billion at current rates). Just last week, the EU allocated €250,000 (approx. KES 37.8 million) in humanitarian aid to support Kenyan families affected by drought and floods.

Key details of the Ukraine support package include:

• Loan Amount: €90 billion (approx. KES 13.6 trillion or $106 billion).
• Purpose: To cover Ukraine's military and civilian financial needs for 2026 and 2027.
• Funding Source: Joint borrowing secured against the common EU budget.
• Repayment Term: Repayment is contingent on Russia paying war reparations to Ukraine.

German Chancellor Friedrich Merz, who had strongly advocated for using the Russian assets, still emphasized that the final deal "sends a clear signal" to Moscow that its aggression will not pay off. The EU has reserved the right to use the immobilised assets for repayment if Russia ultimately fails to pay compensation, keeping the option on the table for the future.