European Union leaders have approved a landmark €90 billion (approx. KES 13.6 trillion) loan for Ukraine, providing a critical financial lifeline to the war-torn nation for the next two years. The agreement, reached after intense late-night negotiations, crucially relies on EU borrowing rather than the contentious proposal of using frozen Russian sovereign assets.

This decision provides immediate relief for Ukraine's battered economy, ensuring it can maintain essential services and military readiness. For Kenyans, this distant negotiation matters as it reinforces the international financial systems that underpin global trade and stability, which directly impact fuel and food prices back home.

The agreement was announced by European Council President Antonio Costa, who posted on X, "We committed, we delivered." The loan is structured to be interest-free, with repayments only expected once Russia pays war reparations to Ukraine.

A Contentious Debate on Seized Funds

The summit sidestepped a legally and politically complex plan to use some of the €210 billion in Russian central bank assets frozen in Europe to back the loan. Belgium, where the majority of the funds are held, raised significant concerns about potential legal retaliation from Moscow and the financial liabilities involved, ultimately leading leaders to opt for the more conventional route of borrowing on capital markets.

Ukrainian President Volodymyr Zelensky, who had strongly advocated for using the Russian assets, nonetheless expressed gratitude for the deal. "This is significant support that truly strengthens our resilience," he noted on social media, emphasizing the importance of keeping the Russian assets immobilized.

• Loan Amount: €90 billion (approx. KES 13.6 trillion).
• Purpose: To cover Ukraine's military and economic needs for the next two years.
• Source of Funds: Backed by the European Union's common budget.
• Key Obstacle: Failure to agree on using frozen Russian assets due to liability concerns.

Macron Suggests New Dialogue with Putin

In a surprising turn, French President Emmanuel Macron suggested it would be "useful" for Europe to find a way to re-engage in dialogue with Russian President Vladimir Putin in the coming weeks. "I believe that it's in our interest as Europeans and Ukrainians to find the right framework to re-engage this discussion," Macron told reporters, introducing a new, and potentially divisive, element to Europe's strategy.