The European Parliament has moved to fast-track legislation for a new EU-backed reparations loan to Ukraine, with a vote scheduled for the January 2026 plenary session.

On Tuesday, MEPs approved—by a show of hands—the use of Parliament’s urgency procedure to accelerate work on the proposal. The draft legislation would establish an EU reparations loan for Ukraine, financed through European Commission borrowing backed by profits and cash balances generated from immobilised Russian state assets.

If adopted, the new financial instrument would help cover Ukraine’s immediate financial needs and support its state budget, including military capabilities. It would also bolster the country’s defence industry and facilitate Ukraine’s integration into the European Defence Industrial Base. The loan would be linked to existing frameworks, notably the Ukraine Facility and the Ukraine Loan Cooperation Mechanism.

Following the decision to speed up the legislative process, Parliament is set to adopt its negotiating position during the next plenary session, taking place from 19 to 22 January 2026, ahead of talks with EU member states.

Next steps

The proposal, which forms part of a broader legislative package, must also secure approval from EU governments in the Council. EU leaders are expected to discuss the path forward at the European Council summit in Brussels on 18–19 December 2025. Photo by Francisco Anzola, Wikimedia commons.