EU shuts out US weapons in $95 billion Ukraine loan amid deepening transatlantic split

BRUSSELS (CN) — U.S. defense contractors will be pushed to the back of the line under Europe’s 90-billion-euro ($95 billion) Ukraine loan, with new rules unveiled Wednesday requiring Kyiv to buy European and Ukrainian weapons first as support under President Donald Trump dwindles.

The European Commission — the EU’s executive arm — on Wednesday presented the legislative blueprint for the loan package EU leaders agreed to last month to keep Ukraine’s government running through 2027. The fine print shows that 60 billion euros set aside for weapons must go to European and Ukrainian suppliers first.

American companies can only compete if the equipment isn’t available closer to home or can’t be delivered fast enough.

To qualify as European, weapons can’t have more than 35% of their parts made outside the continent — the same standard used in the EU’s 150-billion-euro SAFE defense program.

The rules have split EU countries. France is pushing for strict limits to keep money away from U.S. defense firms, while Germany and Northern European countries like the Netherlands want more flexibility, worried that overly restrictive procurement rules could hamper efforts to meet Ukrainian military needs in the coming years.

The proposal doesn’t spell out how Brussels will decide when to approve Ukraine’s requests for non-European weapons — leaving wiggle room that could still allow 15 to 20 billion euros in U.S. sales, especially for air defense and long-range missiles where Europe can’t compete, according to Oscar Luigi Guccione of the German Marshall Fund’s Warsaw office.

But that’s roughly half what U.S. firms would have captured without the Europe-first restrictions, Guccione told Courthouse News.

The approach mirrors buy-European provisions in other recent EU defense programs and marks a major shift as European leaders confront a pattern of U.S. pressure: Trump pushing Ukraine to cede territory to Russia, threatening to seize Greenland — a semiautonomous Danish territory — and deploying U.S. forces to remove Venezuelan President Nicolás Maduro. The crises have crystallized European fears that Washington can no longer be trusted to respect sovereignty — whether in Kyiv, Copenhagen or Caracas.

The financing package is also needed to unlock an $8.1 billion loan from the International Monetary Fund, which wants assurances that Ukraine’s finances can handle the burden as the war enters its fifth year next month. The IMF is expected to vote on the program in February.

“These are billions and billions that are being invested, and these investments should have a return on investment in creating jobs, in creating research and development [in Europe],” Commission President Ursula von der Leyen said at a press conference Wednesday, as EU officials float proposals for greater military integration including a potential 100,000-strong European force.

The rules allow case-by-case exceptions for equipment Ukraine already uses, like spare parts for U.S.-made fighter jets, according to senior commission officials. The EU could also reach broader agreements with countries like Canada that would put their companies on equal footing with European suppliers.

Hungary, Slovakia and the Czech Republic — all opposed to more Ukraine aid — are carved out of the deal and won’t be on the hook financially, though they may still compete for contracts.

Last year was the deadliest for Ukrainian civilians since Russia’s invasion, with casualties up 31% as Moscow ramped up attacks on residential areas and energy infrastructure, according to a U.N. report released Monday.

“Russia shows no sign of abating, no sign of remorse, no sign of seeking peace,” von der Leyen said. “On the contrary, over the Christmas break, we saw that Russia intensifies its strikes, killing civilians and hitting energy infrastructure, and this must end.”

Brussels is also tightening the economic screws on Russia. The EU’s sanctions envoy, David O’Sullivan, said Tuesday the bloc aims to finalize its 20th sanctions package by Feb. 24 — the fourth anniversary of Russia’s invasion — and is pushing China and India hard to stop buying Russian oil.

Oil prices have crashed alongside Western sanctions, hitting Russia’s war chest. Brent crude is selling around $63 per barrel — just under half what it peaked at in March 2022, following the invasion.

“We all want peace for Ukraine, and for that, Ukraine must be in a position of strength on the battlefield and at the negotiating table,” von der Leyen said.

The legislative package now heads to the European Parliament and EU member states for approval. Brussels is pushing for quick adoption by early March so money can start flowing to Kyiv in April.

The EU’s economy chief, Valdis Dombrovskis, said Wednesday Ukraine won’t have to repay the loan until Russia pays war reparations — which could mean never. The EU is holding onto the right to use frozen Russian assets to cover repayment if Moscow refuses.

Wednesday’s joint borrowing plan is a fallback. Brussels originally wanted to tap 210 billion euros in frozen Russian assets directly, but that collapsed at a December 2025 summit. Belgium worried about legal and financial risks to Euroclear, the Brussels-based financial hub holding most of the frozen Russian money. The Trump administration also reportedly pushed European countries to drop the plan.

That bigger Russian assets plan is still on the table if European lawmakers want to revive it, von der Leyen said. In parallel, the EU permanently froze Russian assets last month, ending a system where sanctions had to be renewed every six months.

“Supporting Ukraine is a litmus test for Europe,” Dombrovskis said. “The outcome of Russia’s brutal war of aggression against Ukraine will determine Europe’s future.”

The loan follows a Paris summit last week where France, Britain and Germany committed to deploying peacekeepers to Ukraine if fighting stops, joining a U.S.-led monitoring operation while pledging long-term military support.

Still, the package covers roughly two-thirds of what Ukraine needs for the next two years, according to IMF estimates. Brussels expects other partners to chip in the rest, including 9.7 billion euros from a G7 lending program next year, Dombrovskis said.

Europe and its member countries have provided 193.3 billion euros in total support to Ukraine and Ukrainian refugees since Russia invaded in February 2022. That includes 3.7 billion euros from profits off the frozen Russian assets, according to EU figures.

Wednesday morning, Russia launched 113 attack drones and three ballistic missiles overnight targeting energy facilities across seven regions, Ukrainian President Volodymyr Zelenskyy confirmed in an X post.

Courthouse News correspondent Yuval Molina is based in Brussels, Belgium.