European Parliament.Photo: depositphotos.
TimeUkraineIsrael reports that the European Parliament on Tuesday decided to grant Ukraine an emergency loan of up to 35 billion euros. This amount will be repaid at the expense of future revenues from Russia’s frozen assets located in the EU. This was reported by the press service of the European Parliament.
518 deputies voted in favour, 56 voted against, and 61 abstained. The decision approves a new Macro-Financial Assistance (MFA) package to support Ukraine as it confronts Russia’s brutal aggression. The loan is part of a broader package of measures adopted by the G7 countries in June 2023, which provides financial support to Ukraine worth up to $50 billion (approximately €45 billion). The EU’s final share of this package will depend on the amount of funding provided by other G7 partners.
Key provisions of the new aid
As part of this loan, a newly established cooperation mechanism will allow Ukraine to access funds frozen in the accounts of the Central Bank of Russia in the EU. These funds will be used to service and repay debts to the EU and other G7 partners. If this mechanism is used effectively, Ukraine will be able to disburse the funds from the IMF at its own discretion.
The funds under this programme are to be disbursed by the end of 2025. The loan is conditional on Ukraine fulfilling its obligations to support democratic institutions, respect human rights and meet the conditions set out in the memorandum of understanding. The loan will also be subject to controls to prevent fraud and other financial irregularities.
The importance of support
MEP Karin Karlsbro, rapporteur on the issue, said: “Ukraine continues to bravely resist Russia’s aggression. Its people are fighting not only for their freedom, but also for the preservation of democracy and international law. Financial support remains extremely important and urgent. Russia must pay for the destruction it has wrought by destroying Ukraine’s infrastructure, cities and villages. The reconstruction of the country must be paid for by those who are responsible for this aggression – Russia.”
Next steps
EU governments have already supported this initiative. After the vote in the Parliament, the EU Council plans to adopt the relevant regulation through a written procedure. The regulation will enter into force the day after its publication in the EU’s Official Journal.
Context.
The European Commission has announced a €35 billion loan to Ukraine in September 2023 as part of a G7 plan to provide up to $50 billion in financing. The frozen Russian assets to be used to fund this loan amount to approximately €210 billion and remain blocked due to sanctions imposed over Russia’s invasion of Ukraine in February 2022. The EU has decided to use these assets to support Ukraine’s reconstruction and fund its military efforts.
