WAR AND PEACE: EU’s roughly $105B loan allows Ukraine to keep fighting Russia, changes dynamics of any peace deal.

The outcome, which was the result of difficult and uncertain negotiations, provides dramatic support to Ukraine’s medium-term fiscal viability. It means Kyiv can continue paying soldiers, maintaining domestic weapons production, and resist the temptation to accept an early and unfavorable settlement with Moscow.

The loan is structured so that repayment is designed to be covered by future Russian reparations or proceeds from frozen Russian assets.

The European Union and over 30 other countries signed what is known as the Council of Europe convention establishing an international claims mechanism for Ukrainian losses, a plan designed to increase pressure on Russia and reduce the possibility there could be a “normalization” of the country’s relations with Ukraine without consequences.

Exit quote: “The loans are likely to provide enough support for the Ukrainians to continue their fight for another year or more. And perhaps just as significant, they represent a rare example of European states acting in their own interests without any outsourcing to Washington.”

Trump’s tough-love approach to Europe is working.