A restart of oil flows through the repaired Druzhba pipeline unblocked a €90 billion EU loan package for Ukraine, ending a standoff by Hungary and Slovakia and clearing the way for a fresh round of sanctions on Russia. Kaja Kallas said the impasse was over, and Ukrainian President Volodymyr Zelenskyy urged the first tranche be paid by May or June. The measures pair long‑promised financial aid with tighter controls on ageing tankers and cryptocurrency traders.

How the deadlock broke

The vote followed an abrupt thaw after Ukraine restarted oil flows along the repaired Druzhba pipeline, a route that serves landlocked Hungary and had been at the centre of the dispute. Budapest and Bratislava had used the pipeline issue to block the package, demanding repairs and guarantees over deliveries before they would lift objections to EU support for Kyiv.

Hungary’s outgoing prime minister, Viktor Orban, who this month suffered a decisive election defeat, had pressed the matter as leverage, delaying what EU officials described as urgently needed assistance for Ukraine. Slovakia joined the hold‑up. Once the pipeline resumed operations, the two governments dropped their opposition and the 27 EU member states moved to sign off on both the loan and the sanctions.

The political crunch had exposed divisions in the bloc at a delicate moment: Washington has reduced its own flow of direct aid to Kyiv and eased some restrictions on Russian oil exports amid the US‑Israeli war in the Middle East. The EU move restores a major channel of support to Ukraine after weeks of uncertainty.

What’s in the package

  • A €90 billion support loan for Ukraine, authorised to be disbursed over two years to help plug budget gaps caused by more than four years of conflict.
  • A new, 20th EU sanctions package since Russia’s full‑scale invasion in 2022, targeting energy, banking and trade sectors and aiming to close Kremlin evasion routes.
  • Tighter rules to curb the so‑called “shadow fleet” — older tankers used to move oil — and restrictions aimed at Russian cryptocurrency traders who have helped move money across borders.
  • No full maritime service ban for ships carrying Russian crude was imposed; the EU left room for coordination with Group of Seven partners for any broader ban.
  • Use of a rarely employed mechanism to block sales of certain machinery to Kyrgyzstan, due to fears those goods could be diverted to Russia to circumvent EU curbs.

Economic consequences for Kyiv and Moscow

For Ukraine, the loan package represents an important lifeline. The money is intended to help cover running costs and military spending that have drained state coffers since the invasion began. EU officials said the funding should provide a degree of fiscal certainty for Kyiv and help stabilise its economy ahead of further military and diplomatic challenges.

For Russia, the sanctions add pressure on revenue channels that Moscow has relied on to finance the war. The focus on the shadow fleet and crypto trading recognises how business practices have shifted since the first rounds of sanctions, and the EU is attempting to close those adaptive routes. Kaja Kallas wrote online: “Deadlock over.” She added that Russia’s war economy is under growing strain as a result of the new measures.

The effectiveness of the package will depend on co‑operation from global partners.

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Zelenskyy urged that the first tranche be disbursed by May or June.

This article was created with AI assistance.