On October 22, the European Parliament voted to provide Ukraine with a loan of up to €35 billion, a significant step in the European Union's ongoing support for the country. The loan will be repaid using future revenues generated from frozen Russian assets held within the EU.
The initiative received strong backing, with 518 deputies voting in favor, 56 against, and 61 abstentions. This financial package is part of the macro-financial assistance (MFA) that the EU is providing under the G7 agreement concluded in June of this year. The overall G7 package aims to deliver up to $50 billion in financial support for Ukraine. The final amount from the EU may vary depending on contributions from other G7 nations.
The loan mechanism is designed to utilize future revenues from the frozen assets of the Central Bank of Russia located in the EU. These funds will be used to service and repay the loans to the EU and other G7 partners. Importantly, Ukraine will have the discretion to allocate the received funds according to its priorities.
The loan will be available until the end of 2025, with disbursement contingent upon Ukraine fulfilling its commitments to uphold democratic principles, human rights, and conditions outlined in a forthcoming memorandum of understanding.
Following the European Parliament's approval, the regulation will be adopted by the Council of the EU and will enter into force the day after its publication in the Official Journal of the EU.
Update at 13:51
Ukrainian Prime Minister Denys Shmyhal welcomed the decision, stating:
"This is an important contribution from the EU within the framework of the $50 billion G7 loan utilizing profits from frozen Russian assets. It will help cover Ukraine's urgent financial needs."
Background
At the end of September, during a visit to Kyiv, Ursula von der Leyen, President of the European Commission, announced that the EU would provide Ukraine with a loan of €35 billion, to be repaid using profits from frozen Russian assets. This decision underscores the European Union's solidarity with Ukraine and represents a strategic move to apply economic pressure on Russia.
Ukrainian President Volodymyr Zelensky stated that the funds would be directed toward supporting the energy sector and bolstering the country's defense capabilities. On October 9, it was reported that the Council of the EU had approved the European Commission's loan initiative for Ukraine, paving the way for the European Parliament's endorsement.
