European Union leaders have agreed to provide Ukraine with a €90 billion ($105 billion) loan, addressing its military and economic needs for the next two years, after failing to reach a deal on using frozen Russian assets.

The loan, backed by the EU’s common budget, avoids disputes over liability that blocked proposals to use €200 billion in Russian funds.

Ukrainian President Zelensky warned that without financial support by spring, Ukraine would face severe production cuts, including for drones.

French President Emmanuel Macron suggested Europe should explore re-engaging with Russian President Putin, while US and Russian officials plan talks in Miami on a potential peace plan, the BBC has reported.

The EU’s loan deal provides Ukraine a crucial lifeline amid ongoing financial pressure and diplomatic efforts.