European Union leaders are meeting at the EU Summit in the resort town of Ayia Napa for an informal summit to discuss regional security and the bloc’s financial future. Hosted by Cyprus, which currently holds the rotating presidency of the Council of the EU, the meeting focuses on how Europe should navigate and fund its interests amid the ongoing conflicts in Ukraine and Iran.
EU Summit Approves €90 Billion Ukraine Loan
The primary outcome of the first day was the final agreement to release a long-debated loan to Ukraine and approve a 20th package of sanctions against Russia.
On April 23, European Council President António Costa, European Commission President Ursula von der Leyen, and Ukrainian President Volodymyr Zelenskyy issued a joint statement unblocking the €90 billion aid package. The funds will be distributed over two years, with the first tranche expected in May or June 2026.
The loan is intended to cover Ukraine’s urgent defense and budgetary requirements. In the statement, leaders welcomed the 20th sanctions package, which targets Russia’s shadow fleet, energy sector, and banks. They also urged the international community to help bridge remaining funding gaps for Kyiv. Furthermore, the EU noted Ukraine’s progress in internal reforms and called for the immediate opening of negotiation clusters for its accession to the bloc.
Erdogan Excluded from the Guest List
Turkish President Recep Tayyip Erdoğan was a notable absence at the summit. Although Cyprus had previously indicated that an invitation would be sent to Turkey, it never materialized. According to Euractiv, EU officials attributed the decision to cooling relations between Brussels and Ankara, driven in part by Turkey’s deepening ties with Tehran.
However, the underlying cause is the long-standing conflict between Turkey and Cyprus. The island remains divided, and the Turkish Republic in the north is recognized only by Ankara. On the eve of the summit, Erdoğan held a meeting with the Turkish Cypriot leader in Istanbul, where he stated he would not allow a permanent European military presence on Cyprus. During a meeting with NATO Secretary General Mark Rutte, Erdoğan also criticized the EU for excluding NATO allies from its defense initiatives.
A European ‘NATO’: The Case for an EU Army
Security concerns are particularly acute for Cyprus. While it is an EU member, it is not part of NATO, meaning it is not covered by the Alliance’s Article 5 collective defense clause. This vulnerability became apparent when a Shahed drone struck a British military base on the island following the escalation of the conflict with Iran.
Cypriot President Nicos Christodoulides is calling on the EU to activate Article 42.7 of the EU Treaties, which is an internal mutual assistance mechanism. EU leaders are debating how this provision would function in practice, especially in light of Donald Trump’s suggestions that the United States could withdraw from NATO.
War in Iran and Hormuz Strait Patrols
The blockade of the Strait of Hormuz due to the conflict with Iran has caused global oil prices to surge. EU leaders are discussing potential interventions to secure commercial shipping, but they remain divided on the approach. Germany is willing to protect trade routes but only in cooperation with the U.S. military. France favors strategic autonomy and has proposed a mission involving only “non-belligerent” nations.
The €2 Trillion Budget Dispute
Beyond security, the bloc must negotiate its internal budget for 2028–2034, which totals approximately €2 trillion. António Costa is urging leaders to reach a deal by the end of 2026. This timeline aims to avoid uncertainty ahead of elections in France, Italy, Spain, and Poland, where political shifts could alter national demands.
Agreement remains difficult as wealthy Northern nations are reluctant to increase contributions, while Southern and Eastern members are fighting to keep their subsidies. The situation is complicated by the fact that starting in 2028, the EU must begin repaying €25 billion annually to service debt taken on during the COVID-19 pandemic.
Key Developments at the EU Summit
Aside from the confirmed loan for Ukraine, this informal summit is unlikely to produce major breakthroughs. In EU political practice, these meetings serve primarily for leaders to align their positions and gauge the political landscape before official votes. While collective decisions are limited, practical agreements often emerge from bilateral meetings and side negotiations.