On Tuesday, Members of the European Parliament (MEPs) approved a loan of up to €35 billion for Ukraine, to be repaid with future revenues from frozen Russian assets. The vote showed 518 in favour, 56 against, and 61 abstentions. This macro-financial assistance (MFA) aims to support Ukraine amid the ongoing conflict with Russia. The loan is part of a G7 package agreed last June, which seeks to provide up to $50 billion (about €45 billion) in aid. The final EU contribution may vary based on loans from other G7 partners.
The Ukraine Loan Cooperation Mechanism is a new framework to make future revenues from frozen Russian Central Bank assets in the EU available to Ukraine. These funds will help Ukraine repay the EU’s MFA loan and loans from G7 partners, while Kyiv can allocate MFA funds as it sees fit.
“Ukraine continues to resist Russian aggression, with its brave citizens fighting not only for their own existence and freedom but to defend democracy, human rights, freedom, and international law for all of us. The need for financial support is both immense and urgent. Russia must pay for attacking Ukrainians and brutally destroying the country’s infrastructure, cities, villages, and homes. The burden of rebuilding Ukraine will be shouldered by those responsible for its destruction, namely Russia,” rapporteur Karin Karlsbro (Renew, SE) said.
In September, the European Commission announced a €35 billion loan for Ukraine, part of a G7 plan to issue loans of up to $50 billion. The frozen Russian assets, estimated at €210 billion, are held in the EU due to sanctions imposed after Russia invaded Ukraine in February 2022. EU governments plan to use the profits from these assets to support military efforts and reconstruction in Ukraine.
The new MFA funds will be disbursed until the end of 2025. The loan is contingent upon Ukraine’s ongoing commitment to maintaining effective democratic mechanisms, respecting human rights, and fulfilling additional policy conditions outlined in a memorandum of understanding. Furthermore, the management and control systems specified in the Ukraine Plan and specific measures to prevent fraud and other irregularities will apply to the MFA loan.
EU governments have endorsed the proposal, and the Council intends to adopt the regulation through written procedure following Parliament’s vote. The regulation will take effect the day after it is published in the Official Journal of the EU.
