Ukraine secures €35 bln loan from EU for macro-financial aid
Photo: open sources
The Vice-President of the European Commission, Valdis Dombrovskis, along with Ukrainian Finance Minister Serhii Marchenko and Andrii Pyshny, who leads the National Bank of Ukraine, joined forces to sign a Memorandum of Understanding and Loan Agreement between Ukraine and the EU. This agreement aims to secure up to 35 billion euros in macro-financial assistance (MFA) for Ukraine.
The Ministry of Finance of Ukraine reported this.
"Finance Minister of Ukraine Serhii Marchenko signed a Memorandum of Understanding and a Loan Agreement between Ukraine and the European Union to attract up to 35 billion euros in macro-financial assistance (MFA).
The signatory from Ukraine is also Andrii Pyshny, head of the National Bank of Ukraine, and from the EU is Vice-President of the European Commission Valdis Dombrovskis," the message says.
The funds will be provided within the framework of the G7 initiative on the mechanism of additional loans to increase revenues to the Ukrainian budget.
It is noted that the final amount of MFA will be determined after the approval of the amount of loans from all parties to the initiative. Considering the proposed financing by the United States of 20 billion US dollars, the macro-financial assistance from the EU could amount to 18 billion euros.
A feature of this agreement is that the loan repayment will be carried out exclusively at the expense of future profits from frozen sovereign assets of the Russian Federation in the EU. This means that MFA funds for Ukraine will be provided irrevocably without involving the country's internal financial resources.
The program provides for the implementation of 14 measures to receive assistance in the areas of:
- macro-financial stability,
- state-owned enterprises,
- public administration,
- energy,
- the rule of law,
- fight against corruption,
- defense industry.
"The next important step in attracting funds from the frozen assets of the aggressor country. In recent months, we have been actively working with the European Union and other parties within the initiative to achieve concrete results in meeting Ukraine's financial needs in 2025 and beyond," commented Finance Minister Serhii Marchenko.
The funds will be provided through the new Ukraine Loan Cooperation Mechanism (ULCM), which will give an irrevocable form of macro-financial assistance.
For reference:
On June 14, at the G7 Summit in Italy, the leaders of the G7 countries agreed to send about $50 billion to Ukraine by the end of the year. The funds will be serviced and repaid through future income from frozen Russian sovereign assets held in the European Union and other jurisdictions.
Subsequently, on June 24, the European Union countries approved the first tranche of military aid to Ukraine of up to €1.4 billion, which will come from the proceeds of frozen Russian assets.
In addition, Ukraine will receive a loan of $2.93 billion from Britain using frozen Russian assets. These funds will be used to cover Ukraine's military, budgetary, and reconstruction needs in the fight against Russian aggression.
On October 25, the leaders of the G7 countries agreed on a mechanism for providing Ukraine with loans worth about $50 billion, secured by the proceeds of frozen Russian assets.
Moreover, the G7 countries intend to keep Russian assets frozen even after the end of the war with Ukraine.
