The International Monetary Fund (IMF) has applauded the European Union’s recent decision to lend €90 billion ($105 billion) to Ukraine, describing it as a significant milestone in addressing the country’s financial needs amid ongoing conflict. This announcement, made on December 19, 2025, comes as Ukraine continues to face severe economic strain due to the Russian invasion that began in 2022.

“This is an important milestone towards closing financing gaps and restoring debt sustainability,” an IMF spokesperson stated in response to Reuters. The European Union’s unprecedented financial commitment aims to provide critical support over the next two years, ensuring Ukraine can maintain essential public services and continue funding its defense efforts.

Why the EU Loan is Critical for Ukraine

The €90 billion EU loan is vital for Ukraine, which has been heavily dependent on international donor support since Russia’s full-scale invasion disrupted the nation’s economy. European financial assistance forms a core component of the IMF’s assessment of Ukraine’s debt sustainability, which is a prerequisite for most IMF lending programs.

Earlier in November, Ukraine and the IMF reached a preliminary agreement on a new $8.1 billion lending program, which still requires formal approval from the IMF Executive Board. For the board to finalize the program, Ukraine must fulfill several key preconditions:

• Adopting a budget consistent with the IMF program for the upcoming year.
• Broadening the country’s tax base to improve revenue collection.
• Implementing anti-corruption reforms to strengthen financial governance.
• Securing donor financing assurances.

Currently, no specific date has been set for the IMF Board meeting to consider Ukraine’s new lending program.

EU Loan Covers Majority of Ukraine’s Funding Needs

The IMF estimates that Ukraine will require roughly €135 billion ($158.57 billion) for 2026 and 2027 to stabilize its economy and sustain government operations. The interest-free EU loan is expected to cover nearly two-thirds of Ukraine’s financial requirements during this period, significantly easing the pressure on the government and international donors.

IMF officials stressed the importance of ongoing collaboration with global donors to secure the remaining necessary funding. Ukraine’s Finance Minister, Sergii Marchenko, highlighted the need for continued efforts, including a proposed Reparations Loan, to address long-term financial imbalances caused by the war.

Ukraine’s Financial Strain Amid Ongoing Conflict

The war continues to severely strain Kyiv’s resources, with the government planning to allocate the bulk of state revenues — approximately 2.8 trillion hryvnias, or 27.2% of GDP — toward defense spending in 2026. IMF spokesperson Julie Kozack emphasized that discussions on utilizing frozen Russian assets are ongoing, but the priority remains supporting Ukraine in a way that restores debt sustainability.

IMF and EU Collaboration: A Path Forward

The collaboration between the IMF and EU reflects the international community’s commitment to maintaining Ukraine’s economic stability while mitigating the long-term financial impact of the war. With proper reforms and continued donor support, Ukraine can navigate the immediate financial challenges and build a more resilient economic future.