European Parliament Committee supports EUR 35B loan to Ukraine backed by Russian assets
On October 14, MEPs in the Trade Committee voted by a majority to approve financial support to Ukraine in the form of a EUR 35 billion loan, backed by frozen Russian assets.
This was reported by Ukrinform, citing a statement from the European Parliament.
“The Trade Committee voted by 31 in favor, 4 against and no abstentions on the Commission proposal to support Ukraine with an exceptional Macro-Financial Assistance (MFA) loan of up to €35 billion. This is the EU’s contribution under the G7's initiative to support Ukraine with up to $50 billion (approximately €45 billion) to address Ukraine’s urgent financing needs in the face of Russia’s brutal war of aggression,” the statement reads.
The repayment of this exceptional MFA loan, along with other loans from G7 countries, will be made from extraordinary revenues made from immobilized Russian Central Bank assets and will be enabled by the Ukraine Loan Cooperation Mechanism, recently established at the suggestion of the European Commission.
The future revenues from frozen Russian assets, along with possible contributions from EU member states and other countries, will be available to Ukraine through this mechanism to assist the country in repaying the exceptional MFA loan, as well as loans from other G7 partners considered as eligible by the Commission. These emergency funds will be used exclusively for servicing and repaying eligible loans, including the MFA loan.
Ukraine will be able to allocate funds provided under the MFA loan as it deems necessary. The management and control systems for these payments are outlined in the Ukrainian Plan, along with specific measures aimed at preventing fraud and other violations. The new MFA funds will be available to Ukraine by the end of 2024, and disbursed until the end of 2025.
Additionally, it is emphasized that the MFA loan is conditional upon Ukraine’s continued commitment to uphold democratic reforms and respect human rights. These and other political conditions will be outlined in the memorandum of understanding, which will specify the terms for loan repayments.
The European Commission’s proposal for the repayment of the exceptional MFA loan to Ukraine worth EUR 35 billion still requires the full support of the European Parliament.
The European Parliament is expected to vote on this proposal during its October 21–24 plenary session.
As reported, the EU Council endorsed the proposal last week and is set to adopt the regulation by written procedure after Parliament’s vote. The regulation is expected to enter into force on the day after its publication in the Official Journal of the EU.