European Parliament adopts creation of €50B Ukraine Facility

The Facility provides for EUR 50 billion in financial aid to Ukraine for the next four years. The decision was passed with 515 votes in favour and 45 against, an Ukrinform correspondent reports.

"This is a long-term and ambitious project that we are starting right now, even when the war is not over yet, because we are ready to work together with Ukraine on its European future. We support Ukraine during the war. We will support it further on – during the recovery," speaker Michael Gahler said during the debate at the European Parliament the day before.

At the same time, he emphasized the need for a "master plan to be developed by the Ukrainian government together with local authorities and civil society", as well as coordinated legislative work with the Verkhovna Rada.

"Because this money is not just a loan, we want to see it in investment projects, in joint projects and in private investments in Ukraine’s economy," Gahler added.

"A long list of reforms and investments within the specified time will be added to this plan. Our goal is to make sure that these investments are channeled into the economy – digital, green and integrated with Europe. We plan our future together so that Ukrainians have decent living conditions," said another speaker, Eider Gardiazabal Rubial.

She emphasized that the Ukraine Facility should also be replenished with frozen Russian assets in Europe. Therefore, it is necessary to "develop a legislative framework for the introduction of a mechanism that would provide for the confiscation of Russian assets to be used to compensate for the damage caused to the victims of aggression."

MEPs expect to finish all the formalities already this year, so that the financial support starts in early 2024.

As reported, the European Union developed the Ukraine Facility program to support Ukraine, its recovery and its path to EU accession, with up to €50 billion for the period from 2024 to 2027. The mechanism of this program envisages predictable and stable financial support for Ukraine in the coming years.

The Facility will provide Ukraine with direct financial support in the form of grants and loans ('Pillar I'); mobilise private investments in Ukraine by providing guarantees and blended finance ('Pillar II'); and finance assistance and capacity building programmes for Ukraine's central, regional and municipal tiers of government and civil society to help them achieve the EU acquis and standards ('Pillar III').

The adopted decision indicates the democratic accountability of the Ukraine Facility. The European Parliament insists that it be informed of all relevant steps without undue delay. In addition, the Verkhovna Rada has to approve the so-called master plan. The European Parliament wants to be able to participate in decision-making.

The overall amount proposed is divided into two-thirds loans (€33 billion) and one-third grants (€17 billion). The final allocation will be decided annually in the context of the budgetary procedure by Parliament and the Council.

As a reminder, since the beginning of the full-scale Russian invasion, the European Union has provided Ukraine with 81 billion euros in financial, humanitarian and security assistance.