The loan is part of an international effort to meet a forecast $1 billion shortfall in Ukraine's balance of payments.
But the EU's Finance Commissioner Henning Christophersen said he fully expected Kiev to meet its commitments. "It is a country with a great potential and should be able to repay its debt," he said.
Earlier this year, Ukraine became the first former Soviet republic to conclude a wide-ranging trade and political cooperation deal with the EU.
The approval of the loan was also in recognition of the reforms Ukraine has made under President Leonid Kuchma.
"No one contests the need to support the Ukraine government. It must be encouraged," said French Finance Minister Edmond Alphandery.
But the ministers also stressed the loan be linked to implementing an EU "action plan" to close Chernobyl. Part of the power plant exploded in 1986 but other parts are still in operation.
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