EC proposes up to 35B euro MFA loan to Ukraine as EU’s contribution to EU-G7 support
The European Commission (EC) proposed on September 20 a comprehensive financial assistance package, consisting of a Ukraine Loan Cooperation Mechanism of up to 45 billion euro, and an exceptional Macro-Financial Assistance (MFA) loan of up to 35 billion euro, the EC said in a statement.
“This package leverages extraordinary profits from immobilised Russian assets, sending a clear signal that the burden of rebuilding Ukraine will be shouldered by those responsible for its destruction,” the EC said.
“This approach will be applied for the first time in a structured way and at such a scale across EU and G7 lenders, ensuring long-term, stable financial support for Ukraine’s recovery and resilience,” it said.
The EC first proposes to establish a Ukraine Loan Cooperation Mechanism which will support the EU and G7 partners in issuing loans of up to 45 billion euro to Ukraine.
As Ukraine continues to face unprecedented challenges due to Russia’s intensified aggression, this proposal underscores the EU’s unwavering commitment to Ukraine’s sovereignty and economic resilience, the EC said.
The Commission said that the Ukraine Loan Cooperation Mechanism will offer to Ukraine support financed by leveraging the financial contribution raised on extraordinary windfall profits stemming from immobilised Russian Central Bank assets.
Ukraine can use this support to repay eligible loans from the EU and other lenders participating in the G7’s Extraordinary Revenue Acceleration Loans for Ukraine (ERA) initiative.
As the EU’s contribution to these loans under the ERA initiative, the EC is proposing an exceptional MFA loan of up to 35 billion euro.
This financial support is crucial for addressing Ukraine’s urgent budgetary needs, which have considerably risen in the face of the intensified and prolonged Russian aggression, including under the IMF’s Extended Fund Facility arrangement, the EC said. The remaining loan amount covered is to be provided by other G7 partners.
This comprehensive financial package fulfils the commitments made during the G7 Leaders’ Summit in Apulia on June 15 and during the European Council of June 27, the EC said.
“Through this package, the European Commission reaffirms its commitment to standing by Ukraine in times of need, ensuring that the EU’s support remains steadfast and effective,” the Commission said.
The proposal requires approval by the European Parliament and a qualified majority of EU member states in the Council before entering into force.
The EC said that in view of the urgency of the proposal, it would be working hand in hand with co-legislators to ensure swift adoption.
(Photo: EC Audiovisual Service)
Please support The Sofia Globe’s independent journalism by becoming a subscriber to our page on Patreon:
