Brussels (Brussels Morning Newspaper) – The EU Commission accommodates the agreement reached by G7 partners to collectively deliver €45 billion in financial aid to Ukraine.
The European Commission welcomed the consensus achieved by the EU and G7 partners to collectively provide loans for €45 billion to assist Ukraine’s urgent budgetary, military and reconstruction requirements.
EU Commission stated that this step ensures that the EU and G7 partners meet the commitment they developed in June at the Apulia G7 Leaders’ Summit. These loans will be serviced and repaid by future flows of extraordinary revenues arising from the immobilisation of Russian Central Bank assets. This achievement underlines the unwavering commitment of the EU and its G7 partners to help Ukraine in its fight for its freedom, recovery and reconstruction.
What is the significance of the EU mechanism for the repayment of the loans?
The accord amongst G7 members was enabled by the EU’s creation of the Ukraine Loan Cooperation Mechanism. This tool, recently supported by co-legislators following a proposal of the Commission, will receive unique revenues deriving from the immobilisation of Russian sovereign assets and other voluntary donations made by Member States or third countries. These resources will then be allocated to Ukraine to repay the principal and interest on eligible bilateral loan arrangements with lenders under the G7 ‘Extraordinary Revenue Acceleration (ERA) Loans for Ukraine’ initiative.
According to the EU Commission, to ensure that Ukraine would obtain the full amount of financing perpetrated by G7 Leaders, the EU demonstrated leadership by providing the authorisation to donate to this initiative with an outstanding EU macro-financial assistance (MFA) loan of up to €35 billion.
In light of the approved contributions of G7 partners, ensuring support proportionate to the size of their respective economies, the EU envisions providing an MFA loan of approximately €18 billion as its assistance to the ERA initiative. Through this new unique MFA operation, that is addition to the backing provided by the EU under the €50 billion Ukraine Facility, Ukraine will be able to profit from predictable, continuous, orderly and timely assistance that will contribute to covering a sizeable share of Ukraine’s budgetary demands.
What role do EU institutions play in aiding Ukraine?
Since the start of Russia’s war of aggression against Ukraine, the EU, jointly with its Member States, has unequivocally denounced Russia’s actions and has delivered unprecedented support to Ukraine and its citizens. The EU, its Member States and European Financial Institutions have together delivered about €122 billion in grants and loans, helping the Ukrainian war effort and its economy, allowing it to maintain basic services and delivering early reconstruction, humanitarian aid and help to those fleeing the war in the EU.
