European Commission takes preparatory steps on financial support for Ukraine and boosting drone production

On 1 April, the European Commission took preparatory steps for the implementation of the €90 billion Ukraine Support Loan, aimed at securing necessary budgetary support and accelerating urgent defence procurement for Ukraine in 2026 and 2027. 

The adopted package includes a proposal for the Council to approve the overall amount of the EU’s support to Ukraine for 2026 and a decision validating the use of procurement derogations for the first defence product schedule under the Loan, which will focus on drones.

“We will deliver on the €90 billion loan to Ukraine. Today, we are taking the necessary preparatory steps to mobilise this year’s budget and procure defence equipment, with a focus on Ukraine’s cutting-edge drone industry,” European Commission President Ursula von der Leyen said. “With this we send a clear message: the Commission stands ready to move forward. As we mark four years since the Bucha massacre, we remain fully and firmly behind the brave people of Ukraine and their fight for freedom.”

The Commission proposes to mobilise €45 billion in support for Ukraine by 31 December 2026. The remaining part of the €90 billion Loan is foreseen for next year. 

Following adoption of the available financial assistance by the Council, the Commission will proceed as soon as possible with the first disbursement to Ukraine. This comes in addition to contributions from international donors and takes into account Ukraine’s external financing gap and defence needs. This proposal also defines the split between defence procurement and budget support: budget support will reach up to €16.7 billion, split equally between the Ukraine Facility and Macro-Financial Assistance, while support to Ukraine’s defence industrial capacities will amount to €28.3 billion. 

The budgetary support will be underpinned with strong conditions related to the rule of law, fight against corruption, economic resilience and sustainability, with the first part set to be delivered through the Macro-Financial Assistance.

“As a country at war, Ukraine’s capacity to defend its territory depends on the rapid availability of critical products in the required quantities and within very short timeframes,” the Commission said in a press release. Therefore, it has also adopted a decision allowing Ukraine to use derogations for the procurement of drones. This will support the preparations for the first urgent defence procurements under the instrument and will be followed by additional product schedules on other defence products, including missiles and ammunition, in the coming months.

The European Commission’s proposal will now be submitted to the Council for adoption. Based on this proposal, Member States will decide on the allocation of support under the Ukraine Support Loan for 2026, including through the Ukraine Facility, Macro-Financial Assistance and defence procurement.

Once the Council has adopted the legal basis authorising the Commission to start borrowing on the markets, the remaining legal and operational arrangements required to enable the first disbursements and launch procurements will be finalised by the Commission, Ukraine and Member States.

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Press release