European Commission welcomes G7 consensus on EUR 45B in financial assistance to Ukraine

The European Commission has welcomed the announced consensus reached by the Group of Seven leaders to collectively provide financial assistance to Ukraine in the form of a €45 billion macro-financial loan to be serviced from frozen Russian assets.

This is said in a statement published on the European Commission’s website, Ukrinform reports.

“The Commission welcomes the consensus reached by the EU and G7 partners to collectively provide loans for €45 billion to support Ukraine's urgent budgetary, military and reconstruction needs (approximately $50 billion USD). This confirms that the EU and G7 partners fulfil the commitment they made in June at the Apulia G7 Leaders' Summit. These loans will be serviced and repaid by future flows of extraordinary revenues stemming from the immobilisation of Russian Central Bank assets,” the statement reads.

The European Commission stressed that this achievement underscores the unwavering commitment of the EU and its G7 partners to support Ukraine in its fight for its freedom, recovery and reconstruction.

As noted, the consensus amongst G7 members was facilitated by the EU's creation of the Ukraine Loan Cooperation Mechanism. This mechanism, recently endorsed by co-legislators following a proposal of the Commission, will receive extraordinary revenues stemming from the immobilisation of Russian sovereign assets and other voluntary contributions made by Member States or third countries. These resources will then be distributed to Ukraine to repay the principal and interest on eligible bilateral loan agreements with lenders under the G7 ‘Extraordinary Revenue Acceleration (ERA) Loans for Ukraine' initiative. 

It is also noted that the EU showed leadership by providing the authorisation to contribute to this initiative with an exceptional EU macro-financial assistance (MFA) loan of up to €35 billion.

“In light of the confirmed contributions of G7 partners, ensuring support proportionate to the size of their respective economies, the EU expects to provide an MFA loan of approximately €18 billion as its contribution to the ERA initiative. Through this new exceptional MFA operation, that is additional to the support provided by the EU under the €50 billion Ukraine Facility, Ukraine will be able to benefit from predictable, continuous, orderly and timely support that will contribute to cover a sizeable share of Ukraine's budgetary needs,” the statement says.

“Russia must end its illegal war of aggression and pay for the damage it has caused. The EU has made the G7 pledge a reality. Together, we'll support Ukraine with €45 billion from Russia’s immobilised assets. We're steadfast in our solidarity with Ukraine’s fight for freedom,” noted Ursula von der Leyen, President of the European Commission.

Following the swift adoption by co-legislators of the Commission's proposal this week, the EU will work with Ukraine and G7 partners to operationalise the Ukraine Loan Cooperation Mechanism and MFA loan by the end of this year. This would allow paying out the new EU macro financial assistance to Ukraine in 2025. 

The European Commission recalled that since the beginning of Russia's war of aggression against Ukraine, the EU, together with its Member States, has unequivocally condemned Russia's actions and has offered unprecedented support to Ukraine and its people. The EU, its Member States and European Financial Institutions have together provided nearly €122 billion in grants and loans, supporting the Ukrainian war effort and its economy, helping to maintain basic services and offer early reconstruction, humanitarian assistance and help to those fleeing the war in the EU.

As reported by Ukrinform, the Group of Seven leaders have reached a consensus on the procedure for providing Ukraine with a $50 billion loan from frozen Russian assets.