• EU leaders approve a €90 billion loan for Ukraine to address budget shortfalls.
• Discussions on using frozen Russian assets for funding resulted in no agreement.
• The loan aims to support Ukraine's military and economic needs for the next two years.
• Ukrainian President Zelensky emphasized the need for the funds to maintain operational capabilities.
• The situation unfolds amid heightened diplomatic efforts to resolve the ongoing war.

EU leaders have reached a significant agreement to provide Ukraine with a €90 billion loan, equivalent to approximately $106 billion, intended to support the country's military and economic needs over the next two years. This decision was confirmed by European Council President Antonio Costa, who stated, "We committed, we delivered," following extensive negotiations at a Brussels summit, according to Le Monde, South China Morning Post, and BBC.

The agreement, however, did not include provisions to utilize frozen Russian assets, which Ukraine had been advocating for as a logical source of funding. President Zelensky had sought discussions regarding the use of around €200 billion in Russian assets but faced resistance, particularly from Belgium, where most of these assets are held. Belgian officials required liability guarantees that other EU countries were reluctant to accept, leaving the loan to rely on the EU's common budget instead, as highlighted by various leaders, including German Chancellor Friedrich Merz, according to Le Monde and BBC.

This financial lifeline comes at a critical time as Ukraine faces a looming budget shortfall, with EU estimates suggesting that the country requires an additional €135 billion over the coming two years. Without immediate financial assistance, Ukraine may need to reduce its operational capabilities, such as the production of vital military assets like drones, President Zelensky cautioned, according to South China Morning Post and BBC.

The backdrop of the funding agreement features ongoing diplomatic efforts to end the conflict, with US President Donald Trump emphasizing the need for rapid negotiations. The upcoming talks between Ukrainian and US delegations are expected to deepen discussions over potential security guarantees to protect Ukraine from further aggression, highlighting the international implications of the conflict, according to South China Morning Post and BBC.