European Parliament approves up to 35B euro loan to Ukraine backed by Russian assets
Members of the European Parliament voted on October 22 to approve a special loan of up to 35 billion euro to Ukraine, to be repaid with future revenues from frozen Russian assets.
With 518 votes in favour, 56 against and 61 abstentions, the European Parliament endorsed the new macro-financial assistance (MFA) to help Ukraine against Russia’s brutal war of aggression.
This loan is the EU’s part of a G7 package agreed last June, to provide up to $50 billion (about 45 billion euro) in financial support to Ukraine.
The final amount that the EU will contribute could be lower, depending on the size of the loans provided by other G7 partners, the European Parliament said.
The Ukraine Loan Cooperation Mechanism, a newly established framework, will make future revenue from the frozen Russian Central Bank assets located in the EU available to Ukraine.
These funds will help Ukraine service and repay the EU’s MFA loan as well as loans from other G7 partners.
While the mechanism’s funds can be used to service and repay loans, Kyiv may allocate the MFA funds as it sees fit.
The new MFA funds will be disbursed until the end of 2025.
The loan is conditional upon Ukraine’s continued commitment to uphold effective democratic mechanisms, respect human rights, and further policy conditions to be set out in a memorandum of understanding.
Additionally, the management and control systems outlined in the Ukraine Plan, along with specific measures to prevent fraud and other irregularities, will apply to the MFA loan.
EU governments already endorsed the proposal, and the Council of the EU plans to adopt the regulation by written procedure after the European Parliament’s vote. The regulation will enter into force on the day after its publication in the Official Journal of the EU.
(Photo: European Parliament)
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