Prime Minister Robert Abela said that Malta played a decisive role in steering EU leaders away from a proposal that would have exposed member states to unlimited financial liability, as the European Council reached agreement on a joint EU loan instrument to finance Ukraine's needs over the next two years.

Speaking after the European Council meeting in Brussels, Abela described the negotiations as among the most difficult decisions he has faced in the past six years, warning that earlier proposals would have left Malta and other member states exposed to uncapped damages.

Abela said that Malta had taken a clear position even before the formal Council began, saying that any mechanism to assist Ukraine must be grounded in solid legal foundations and be fully compliant with European and international law.

"When one looks at the text circulated yesterday evening, the reality was that what was being proposed would have exposed member states to damages without any limit or capping," Abela said.

He explained that the proposal included joint and several liability, meaning all participating states could have been pursued together for damages.

Following interventions by Malta and other states, that option was ultimately abandoned.

Instead, leaders agreed on an alternative financing model through a joint EU loan instrument, without the use of seized Russian assets.

"We have always been in favour of helping Ukraine, but through instruments that have a strong legal basis and that do not expose our country to risks that could bring it to its knees," Abela said.

Abela said the agreement reached in the early hours of Thursday morning ensures that Ukraine will have financing for the next two years, while safeguarding Malta from potentially limitless financial exposure.

Asked whether the potential damages could be quantified, Abela said this was impossible, as no maximum amount could have been established.

"This is why the decision we took was crucial," Abela said, noting that Malta's position had been maintained with much perseverance.

"Today we know exactly where our country stands, and I am satisfied to report that we achieved what we set out to do from the outset," Abela said.

Abela said that prior to the formal European Council, a separate meeting was held between a number of member states focusing on immigration, a subject he described as crucial given the continued rise in pressures across Europe.

"Situations change from day to day, and that is why we have always worked towards a joint approach, with a number of states working together to find solutions," he said, describing the progress reached so far as "phenomenal."

He said that difficult and ambitious decisions would need to be taken in the coming months, stressing the need to balance humane responses with firm action against organised crime networks exploiting vulnerable people.

"We are dealing with human lives at their most vulnerable, while at the same time confronting organised crime rings. As leaders of member states, we must have all the tools necessary to combat this phenomenon," Abela said.

EU leaders also discussed the bloc's next long-term budget, which will come into force from 2028.

Abela recalled that Malta had negotiated its largest-ever EU funding package in 2020 but acknowledged that negotiations this time will be more challenging given the country's economic growth.

He said that Malta has already made it clear that its particular realities must be taken into account to reach a balanced agreement, as discussions enter what he described as a year of intensive negotiations.

"It is crucial to remain immensely focused so that we once again secure this package of European funds for our people," Abela said.