EU approves provision of EUR 35B loan to Ukraine

The European Council on Wednesday reached an agreement on a financial assistance package to Ukraine, including an exceptional macro-financial assistance (MFA) loan of up to EUR 35 billion and a loan cooperation mechanism that will support Ukraine in repaying loans for up to EUR 45 billion provided by the EU and G7 partners.

The European Council said this in a press release, Ukrinform reports.

The financial assistance aims to provide immediate relief to Ukraine's urgent financing needs that have increased due to Russia's intensified aggression towards Ukraine.

"The repayment of the exceptional MFA loan and eligible bilateral loans from G7 partners under the ‘Extraordinary Revenue Acceleration Loans for Ukraine' (ERA) initiative, will be ensured by funds coming from future flows of extraordinary revenues stemming from the immobilization of Russian sovereign assets," the press release reads.

The Ukraine loan mechanism will disburse these funds - as well as possible amounts received as voluntary contributions from member states and third countries or other sources -in the form of financial support to Ukraine, to assist it in servicing and repaying the loans.

The up to EUR 35 billion MFA loan is the EU's contribution to the G7 loan of up to EUR 45 billion. The new MFA operation will be linked to policy conditions that are consistent with the Ukraine Facility, in particular the Ukraine Plan. The management and control systems proposed under the Ukraine Plan and specific provisions on the prevention of fraud and other irregularities will also apply to the MFA loan.

"In view of a speedy adoption and ensuring that the macro-financial assistance reaches Ukraine as soon as possible, member states agreed today that if the European Parliament adopts the Commission's proposal without changes, the Council will also proceed to adopt the text without modifications," the European Council said.

The Council plans to adopt the regulation by written procedure after the European Parliament has adopted the text in first reading. The regulation is expected to enter into force on the day after its publication in the Official Journal of the EU.

The aim is to make the MFA loan available in 2024, with disbursement in 2025, to be repaid over a maximum period of 45 years.