Two kinds of backing for Ukraine

Friday 19 December 2025

Ukraine has, in the same week, received two very different kinds of Western backing: the United States National Defense Authorization Act (often confused with an appropriations act) signed by President Trump on 18 December 2025, and a European Union decision on 19 December 2025 to raise an EU-backed loan of €90 billion for 2026–2027. Both matter, but they help Ukraine in different ways, on different timelines, and with different political messages attached.

What each instrument actually is

The American measure is a defence authorisation statute. It sets policy, gives legal authorities and authorises ceilings for programmes, but it does not itself move cash in the way a classic appropriations law does. For Ukraine, its most tangible “benefit” is the continuation of specific assistance authorities and the political fact of Congress mandating them, even where the White House’s instincts may lean towards retrenchment. 

The European measure is straightforward fiscal engineering: the EU will borrow on capital markets, backed by the EU budget’s headroom, and lend the proceeds to Ukraine, described by multiple outlets as interest-free, to cover urgent financing needs over 2026 and 2027, including defence and state functioning. 

So one is principally about military policy authorities, guardrails and limited programme funding authorisations; the other is a macro-financial lifeline designed to prevent the Ukrainian state from running out of money.

Scale: money versus munitions

On pure headline scale, the EU loan dwarfs the Ukraine-related sums specified in the US Act.

Congress’s FY2026 NDAA authorises $800 million for Ukraine, framed as $400 million in each of the next two years, under the Ukraine Security Assistance Initiative (USAI), which pays US companies for weapons intended for Ukraine. That is not trivial, but it is deliberately bounded and, in contemporary budgetary terms, modest.

By contrast the EU loan is €90 billion over two years. It is designed to cover a large share of Ukraine’s overall financing needs, not merely to underwrite a single military procurement mechanism. In practical terms, this is what keeps salaries paid, pensions disbursed, procurement contracts honoured, air defence crews fed, fuel bought and the grid repaired.

The contrast reveals a structural difference in Western support as of late 2025: Washington’s direct pipeline has narrowed and become more conditional, while Brussels has leaned into state-financing and long-horizon predictability.

Time horizons and certainty

The EU’s decision is explicitly about 2026–2027, and its main benefit is predictability. Ukraine’s wartime economy suffers not only from insufficient resources but from volatility. When ministries cannot reliably forecast cashflow three months ahead, procurement becomes more expensive, contractors demand risk premia and mobilisation systems strain. A two-year envelope, borrowed at the EU level and intended to be available quickly (some reports suggest mid-January 2026), is therefore a strategic instrument, not merely a financial one. 

The NDAA’s benefit is different: it institutionalises a baseline of US military support and, crucially, it constrains abrupt policy swings. Reuters reports that it limits the Department of Defense’s ability to reduce US forces in Europe below 76,000 and bars the US European Commander from surrendering the NATO Supreme Commander title. Those provisions are not “aid to Ukraine” in the narrow sense, but they buttress the broader deterrence architecture on which Ukraine’s rear-area security and European resupply routes depend. They are, in effect, insurance against a sudden US draw-down that would embolden Moscow and unsettle Europe.

In short: the EU offers Ukraine fiscal certainty; the US offers Ukraine institutional continuity and a floor beneath certain security commitments.

Political signalling: unity, conditionality and leverage

Both measures are signals to Moscow, but they speak in different dialects.

The EU loan is a unity signal produced under strain. It was agreed despite divisions about using frozen Russian sovereign assets and despite reservations from Hungary, Slovakia and Czechia, which were addressed through an arrangement that prevents EU budget mobilisation from impacting those states’ financial obligations. The loan is to be repaid from Russian reparations (which is why establishment of the International Claims Commission of Ukraine this week was so important; that body can be used to make claims against frozen Russian sovereign assets and thereby provide a loan repayment mechanism.) The message to the Kremlin is that the EU can still generate very large sums and keep Ukraine solvent, even when the most politically incendiary tool (immediately seizing or collateralising principal Russian assets) stalls.

The American NDAA, passed with broad bipartisan support, is a signal of Congressional insistence. Reuters explicitly frames parts of the Act as a break with President Trump’s preference to reassess Europe and to be cautious about open-ended commitments. For Ukraine, that matters because it demonstrates that support does not depend solely upon the temperament of one administration. It also creates leverage in allied negotiations: European capitals can point to mandated US authorisations and force-posture guardrails when making the case that Washington remains engaged in Europe’s defence.

Yet there is also conditionality implicit in the US approach. The Ukrainian Security Assistance Initiative structure, over seen by the Department of Defense (now the Department of War), pays American industry and can elongate delivery timelines, especially if production capacity is constrained. The EU loan, conversely, is immediately usable cash, but it increases Ukraine’s future debt stock even if repayment is politically framed as contingent on Russian reparations. 

Practical battlefield effects

The EU loan is not “battlefield aid” in a narrow sense, but it is a precondition for battlefield stamina. A state that cannot fund logistics, maintenance, mobilisation administration, social stability and energy resilience will struggle to keep brigades effective, no matter how brave its soldiers are. Because the loan covers general financing needs, it supports the invisible scaffolding of war.

The NDAA’s Ukraine line-items are closer to battlefield relevance, but at a smaller scale. The $800 million Ukraine Security Assisstance Initiative authorisation can translate into specific capability increments if used wisely, especially in high-leverage categories where Ukraine can rapidly absorb equipment: air defence interceptors, counter-drone systems, battlefield communications and certain munitions classes. 

However the NDAA’s less obvious battlefield contribution may be its Europe-related constraints. If the US force posture in Europe is harder to reduce quickly, then the credibility of NATO’s deterrence improves, which in turn reduces the odds of Moscow widening the war geographically or coercing European states into limiting support. That strategic rear-area stability is not glamorous, but it is decisive.

Strategic risk: debt, politics and the frozen-assets question

Each measure carries its own risk profile.

For the EU loan, the obvious concern is debt sustainability and the politics of repayment. Even if leaders say Ukraine repays only after Russia pays reparations, this remains politically and legally complex, and it embeds Ukraine deeper into a creditor relationship with the EU. That is why establishing the International Claims Commission of Ukraine this week was so vital: it establishes an international legal route to settling claims against Russia and thereby to seizing frozen Russian assets in Europe and beyond to repay the loan. There is also a strategic communications risk: Moscow will portray EU help as turning Ukraine into a debtor dependency, even if the reality is closer to wartime mutual necessity.

For the US NDAA, the risk is that authorisation without robust, timely appropriations and execution can become performative. A line in an Act does not automatically become an air defence battery in Kharkiv. The Act’s Ukraine provisions are therefore best understood as a floor, not a surge.

But there is an upside to this divergence. Ukraine benefits from diversification: some support arrives as cash to keep the state operating, while some arrives as structured military procurement and deterrence architecture. Together they reduce single-point failure. If one channel narrows, the other can still carry weight.

Complementary benefits, different logics

Taken together, the two measures show a division of labour which is as political as it is financial.

The EU loan is about endurance. It shores up the Ukrainian state for 2026–2027 and helps to convert moral support into solvency and planning confidence. The NDAA is about guardrails and legitimacy: it sets a minimum authorised pipeline for Ukraine-related security assistance and makes it harder to unwind the US role in Europe’s defence architecture abruptly. 

For Kyiv, the best way to read the week is not as a choice between Washington and Brussels, but as a composite picture of Western strategy at the end of 2025: Europe underwriting the Ukrainian state, and America, even under a sceptical President, still bound by statute and alliance structure to a degree of European and Ukrainian security support.