European Parliament approves up to €35 billion loan to Ukraine backed by Russian assets

Members of the European Parliament (MEPs) on Tuesday gave the green light to an emergency loan of up to €35 billion to Ukraine, to be repaid with future revenues from frozen Russian assets.

The EP approves new macro-financial assistance (MFA) to help Ukraine against brutal Russian aggression by 518 votes to 56, with 61 abstentions. The loan is part of an EU package agreed by the G7 last June to provide Ukraine with up to $50 billion (around €45 billion) in financial support. The final amount the EU will contribute may be lower depending on the level of loans provided by other G7 partners.

The Cooperation Mechanism for Lending to Ukraine, a newly established framework, will allow Ukraine to receive future revenues from the frozen assets of the Russian Central Bank located in the EU. These funds will help Ukraine service and repay the EU macro-financial assistance loan as well as loans from other G7 partners. While the Facility funds can be used to service and repay the loans, Kiev can allocate the MFA funds at its discretion.

The new MFA funds will be disbursed until the end of 2025. The loan is conditional on Ukraine's continued commitment to maintain effective democratic mechanisms, respect for human rights and other policy conditions to be set out in a Memorandum of Understanding. In addition, the MFA loan will be subject to the management and control systems set out in the roadmap for Ukraine, together with specific measures to prevent fraud and other irregularities.

"Ukraine continues to resist Russian aggression and its brave citizens are fighting not only for their own existence and freedom, but also to defend democracy, human rights, freedom and international law for all of us. The need for financial support is great and urgent. Russia must pay for its attacks on Ukrainians and the brutal destruction of the country's infrastructure, towns, villages and homes. The burden of rebuilding Ukraine will be borne by those responsible for its destruction, namely Russia," said the rapporteur Karin Karlsbro (Renew, SE).

EU governments have already approved the proposal and the Council plans to adopt the Regulation by written procedure after the EP vote. The regulation will enter into force the day after its publication in the Official Journal of the EU.

EP/ gnews - RoZ