MEPs in the European Parliament's Trade Committee voted on Monday to support a loan of up to €35 billion for Ukraine as the EU's contribution to the G7 support initiative.
The Trade Committee voted 31 in favour, four against and no abstentions on the Commission's proposal to support Ukraine with an emergency loan of up to €35 billion in macro-financial assistance (MFA). This is the EU's contribution under the G7 initiative to support Ukraine with up to $50 billion (around €45 billion) to address Ukraine's urgent financial needs in the face of Russia's brutal war of aggression.
The repayment of this exceptional loan under the MFA and loans from other G7 countries will be made from the exceptional proceeds of the immobilised assets of the Russian Central Bank, which will be made possible by the cooperation mechanism for lending to Ukraine newly established under the Commission proposal.
Future revenues from frozen Russian assets, as well as possible contributions from EU Member States and other countries, are to be made available through this mechanism to Ukraine to help it repay the IFA emergency loan as well as loans from other G7 partners deemed eligible by the Commission. These funds will only be used to service and repay eligible loans and the MFA loan.
The new IFA loan is non-purposeful, so Ukraine can allocate the funds as it sees fit. The management and control systems set out in in the plan for Ukraine together with specific measures to prevent fraud and other irregularities, will also apply to the MFA loan. The new MFA funds will be available until the end of 2024 and disbursed until the end of 2025. The MFA 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.
"The use of profits from immobilised Russian assets is a clear signal that the burden of rebuilding Ukraine must be borne by those responsible for its destruction, namely Russia. The new mechanism of macro-financial assistance and credit cooperation supports Ukraine in maintaining important basic functions in society. The important step is to make Russia pay. Ukraine is not only fighting for its own existence and freedom, but also for ours. This proposal underlines the EU's unwavering commitment to Ukraine's sovereignty and economic resilience," said the rapporteur Karin Karlsbro (Renew, SE).
Parliament is expected to vote on the proposal at its session on 21-24 October. The Council proposal Approved by last week and plans to adopt the regulation by written procedure after Parliament's vote. The regulation is expected to enter into force the day after its publication in the Official Journal of the EU.
In September, the Commission announced a €35 billion EU loan to Ukraine as part of a plan by G7 partners to provide loans of up to $50 billion (€45 billion). The loans would be financed by future revenues from frozen Russian state assets. The EU holds around €210 billion worth of Russian central bank assets, which have been frozen under sanctions imposed over Moscow's February 2022 invasion of Ukraine. EU governments have decided to earmark emergency revenues from these assets and use them to support both the military effort and Ukraine's reconstruction. The establishment of the Ukraine Credit Cooperation Mechanism underlines the EU's continued support for Ukraine.
European Parliament/ gnews - RoZ
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