EU Council approves €35 bln in macro-financial aid and new repayment mechanism for Ukraine's €45 bln loan
The EU Council has approved the provision of 35 billion euros in macro-financial aid to Ukraine and a new mechanism to assist in repaying loans up to 45 billion euros from the EU and G7 countries.
A press release on the EU Council's website evidences this, according to Ukrinform.
"Financial aid aims to provide immediate assistance to meet Ukraine's urgent financial needs, which have increased due to increased Russian aggression against Ukraine," the press release states.
Future earnings from frozen Russian assets in the EU will provide the funds for repayment of the macro-financial assistance (MFA) and accompanying bilateral loans from G7 countries under the Extraordinary Revenue Acceleration Loans for Ukraine (ERA) program.
The credit facility will allocate these funds, and potential donations from EU member states, third countries or other sources to provide financial assistance to Ukraine, helping it manage and repay its loans.
It is noted that to quickly adopt and ensure the fastest possible arrival of macro-financial assistance to Ukraine; the EU member states agreed on Wednesday that if the European Parliament adopts the proposal of the European Commission without changes, the Council of the EU will also adopt the text without changes.
"The goal is to make the MFA loan available in 2024, with repayment in 2025, with a maximum repayment period of 45 years," the press release said.
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According to the European Council's decision, as reported, Russian assets will remain frozen until Russia ceases the war against Ukraine and provides reparations for the harm caused by it. This implies that the assets will remain frozen until Russia repays the loans through compensation.
At the G7 summit in Italy on June 14, 2024, the leaders of the G7 countries agreed to allocate about $ 50 billion to Ukraine. The funds will be serviced and repaid from future earnings from frozen sovereign Russian assets in the European Union and other jurisdictions.
The frozen assets of the Russian central bank in the EU amount to 210 billion euros and constitute the majority of such immobilized assets worldwide. Depending on the level of interest rates, the income from these assets is currently estimated at 2.5-3 billion euros per year.
