The leaders decided early on Friday ‍to borrow cash on capital markets to fund Ukraine’s defence against Russia rather than use frozen Russian assets, diplomats noted.

“We have a deal. Decision to provide 90 billion euros [$105.5bn] of support to Ukraine for 2026-27 approved. We committed, we delivered,” Costa said in a post on social media early on Friday.

Costa did not specify the source of the funding, which came after EU leaders worked deep into Thursday night to reach an agreement.

But a draft text of the summit’s conclusions, seen by the Reuters news agency, said it would come from capital markets, secured against the ⁠EU budget, rather than the bloc proceeding with its contentious plan to use frozen Russian assets for a loan supporting Ukraine’s war effort.

At the same ​time, EU governments and the European Parliament will continue discussing setting up a loan for Ukraine that would be based on Russian central ‍bank assets.

Friday’s deal will not affect the financial obligations of Hungary, Slovakia and the Czech Republic, which did not want to contribute to the financing of Ukraine, the text said.

Kyiv will only repay the EU loan based on joint borrowing once it receives war reparations from Moscow. Until then, the Russian assets will remain immobilised, while the EU has also reserved the right to use them to repay the loan, according to the text.

“It’s good in the sense that Ukraine will secure funding for two years,” one unnamed EU diplomat told Reuters.

The move followed hours of discussions among leaders on the technical ‍and legal details of a loan based ⁠on frozen Russian assets – which turned out to be too complex or politically demanding to sort out at this stage, diplomats announced.

“We have gone from saving Ukraine to saving face, at least that of those who have been pushing for the use of the frozen assets,” a second EU diplomat added.

The main difficulty in the use of the Russian money was providing Belgium – where about 185 billion ($217bn) of the total 210 billion euros ($246bn) of frozen assets are held – with sufficient guarantees against financial and legal retaliation from Moscow.

The Kremlin has announced it will launch legal action and seize foreign assets in Russia should the plan to use its assets go ahead.

The 27-nation bloc is scrambling to bolster its ally Ukraine, as US President Donald Trump pushes for a deal with President Vladimir Putin to end the fighting.

Officials have insisted the talks will last as long as it takes to hammer out an agreement, saying both Ukraine’s survival — nearly four years into the war — and Europe’s credibility are at stake.

“We will not leave the European summit without a solution for the funding of Ukraine,” European Commission head Ursula von der Leyen stressed.

The EU’s executive wants to fund a loan to Ukraine by using frozen assets from Russia’s central bank, though it is holding on to a back-up plan for the bloc to raise the money itself.

Ukraine President Volodymyr Zelenskyy will join the EU summit to try to press the case for using Russia’s assets — with German Chancellor Friedrich Merz among those insisting there was “no better option.”

Zelensky stated Thursday that any failure by EU leaders to agree on a plan to use frozen Russian assets to support Ukraine would be a serious challenge for his war-torn country.

“I will speak with all the leaders, present our arguments, and I very much hope we can obtain a positive decision. Without it, there will be a big problem for Ukraine,” Zelensky told reporters, ahead of a visit to Brussels for an EU summit.

But Belgium’s Prime Minister Bart De Wever said he had not been convinced so far.

“I have not seen a text that could persuade me to give Belgium’s agreement,” he told Belgian lawmakers, adding that he hoped to see something convincing on Thursday.

The vast bulk of the funds are held by international deposit organization Euroclear in Belgium, and the government fears it could face crippling financial and legal reprisals from Moscow.

EU officials say they have gone out of their way to allay Belgian worries and that multiple layers of protection — including guarantees from other member states — mean the risks are minimal.

“At this stage, the guarantees offered by the Commission remain insufficient,” De Wever added.

The EU estimates Ukraine needs an extra 135 billion euros ($159 billion) to stay afloat over the next two years — with the cash crunch set to start in April.

In a bid to plug Kyiv’s yawning gap, the Commission has proposed tapping 210 billion euros of frozen assets, initially to provide Kyiv 90 billion euros over two years.

The unprecedented scheme would see the funds loaned to the EU, which would then loan them on to Ukraine.

Kyiv would then only pay back the “reparations loan” once the Kremlin compensates it for the damage.

In theory, other EU countries could override Belgium and ram the initiative through with a weighted majority, but that would be a nuclear option that few see as likely for now.

The commission’s back-up plan involves the EU raising the money itself, but it would require unanimous approval from the EU’s 27 leaders and Hungary has ruled it out.

De Wever nonetheless is planning to try to revive that idea, and other countries may be open to his argument.

Bubbling close to the surface of the EU’s discussion are the US efforts to forge a deal to end the war.

Zelensky also confirmed Thursday that Ukrainian and US delegations would hold new talks on Friday and Saturday in the United States aiming to end the Russian invasion.

Ukraine has announced that Washington was “pressuring” the EU not to use the assets as they view them as a vital bargaining chip in winning over Russia.

But EU officials deny that and say that, if anything, the push for peace has spurred the efforts to tap the Russian funds.

Given that Ukraine has only months before the shortfalls bite, diplomats and officials insist leaders will find a way to keep funds flowing — even if this week yields only a loose deal with details to be hammered out later.

“I hope that we get this over the finishing line,” EU top diplomat Kaja Kallas said, adding, “Putin is banking on us to fail, so we shouldn’t give him that.”

The European Union has laid out a plan to use the frozen assets to harness 90 billion euros ($105 billion) for a loan to help Ukraine repel Moscow’s forces, with the money to be paid back by any eventual Russian reparations to Ukraine.

“The US administration is pressuring European countries to abandon the idea of using Russian assets to support Ukraine,” a senior Ukrainian official said Wednesday.

The plan has the strong backing of many member states, including Germany, but has drawn opposition from others, including Belgium — home to international deposit organisation Euroclear, which holds most of the assets — whose leaders fear Russian reprisals.

The Ukrainian official said that seven countries so far opposed the plan.

Zelensky “is going to Brussels to motivate European countries to adopt this decision” and tap the frozen assets, the source added.

Belgian Prime Minister Bart De Wever has been in the spotlight over his opposition to using Russian assets for Ukraine, but there had been speculation that US President Donald Trump’s administration was also weighing in on the debate.

Washington appears to view the assets as a key bargaining chip and has looked to tempt Moscow to play ball by dangling the prospect it could get back some of the cash.

A US official, speaking on condition of anonymity, told AFP on Wednesday that the Europeans were “quietly asking us to intervene on this matter as they do not want to be publicly against it”.

“They are afraid of the long-term damage it will do to long-term investments in their system and the credibility of their institutions,” the official added.

A previous version of Trump’s plan to end the war also provided for Washington to use some frozen Russian assets for a US-led reconstruction of the war-torn country.

Around 200 billion euros in Russian central bank assets were frozen over Moscow’s February 2022 invasion of Ukraine.

White House deputy press secretary Anna Kelly stated: “Both the Ukrainians and the Russians have clearly stated positions regarding the frozen assets, and our only role is to facilitate a back-and-forth that can ultimately result in a deal.”