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The EU Council has reached an agreement to provide Ukraine with a macro-financial assistance package of up to €35 billion as part of a G7 loan, using profits from frozen Russian assets. This was announced by the EU Council’s press service on the evening of October 9.
This exceptional loan will form part of the €45 billion (equivalent to $50 billion) G7 credit, which will be repaid using future profits from investing frozen Russian sovereign assets. The agreement on the broader G7 loan was made by leaders in June.
The funds are expected to become available to Ukraine starting in 2024, with a maximum repayment period of 45 years. This new financial assistance will be tied to political conditions aligned with the already existing EU Ukraine Facility, with specific reforms outlined in the Ukraine Plan.
The mechanism also includes provisions for managing and controlling the funds to prevent fraud and other violations, similar to those already in place under the Ukraine Plan.
The decision will proceed through a written procedure by the EU Council once the European Parliament approves the proposal. The agreement is expected to come into effect the day after its publication in the EU’s Official Journal.
This loan is significant in ensuring continued financial support for Ukraine amidst ongoing challenges with Russia, while addressing some concerns, particularly from the U.S., about the long-term continuation of sanctions on Russia to ensure repayment from frozen assets. However, Hungary had threatened to block the decision within the EU, which added complexity to the negotiations. According to reports, the U.S. will still participate in the loan, although the final contribution may be smaller than originally anticipated. The European Parliament is expected to vote on the proposal on October 22.
