Key facts
- Estonian PM Kristen Michal believes a new EU loan for Ukraine is probable.
- Ukraine faces a budget gap of over $70 billion for next year.
- EU leaders previously agreed to a €90 billion loan for Ukraine for 2026-2027.
The European Union will likely need to provide a new loan to Ukraine to cover its budget deficit for the upcoming year and sustain its defense against Russia's invasion, according to Estonian Prime Minister Kristen Michal. Speaking to Reuters on Friday, Michal emphasized that continuous financial assistance is crucial for Ukraine's war effort. EU leaders had previously agreed to a €90 billion loan for Ukraine to cover much of its financial needs for 2026 and 2027. However, Kyiv has stated it now faces a deficit exceeding $70 billion for defense and regular budget spending next year. While some European governments have advocated for using frozen Russian assets, this proposal has been met with opposition from Belgium and several other EU nations. Michal suggested that another EU loan is the most probable solution, a mechanism the EU has utilized multiple times before. He expressed hope that EU leaders would reach a decision on additional funding for Ukraine for 2027 before the end of the current year, anticipating a year with numerous elections across Europe.