European Parliament Approves €50 Billion Aid Package for Ukraine

by Roman Cheplyk
Tuesday, February 27, 2024
European Parliament Approves €50 Billion Aid Package for Ukraine

The European Parliament, in a significant majority vote, has endorsed a resolution to amend the EU’s multi-year budget framework, introducing the Ukraine Facility fund dedicated to supporting Ukraine’s recovery over the next four years

During the plenary session held on February 27, the resolution was passed with 536 votes in favor, with 40 deputies voting against and 39 abstaining.

This landmark decision by the European Parliament facilitates the provision of €50 billion in aid to Ukraine, spread over four years under specified conditions. The resolution emphasizes the need for a flexible tool in the Ukraine Facility fund to offer necessary and adequate support to Ukraine until 2027, amidst the ongoing uncertainties of Russia's aggression against Ukraine.

The financial support encompasses loans, grants, and budgetary guarantees. Specifically, the EU has established a borrowing limit of €33 billion for Ukraine, available over the next four years with loan terms extending up to 35 years. Additionally, to ensure non-repayable support, the EU has instituted a special mechanism, the "Ukrainian Reserve," which will be determined annually based on the progress of Ukraine's recovery and reform plan.

This decision follows the consensus reached by EU leaders on February 1, endorsing a €50 billion financial assistance package for Ukraine until 2027 under the Ukraine Facility program. The discussion around this substantial funding had been ongoing for several months within the EU. However, a decision was initially stalled in December 2023 due to a veto by Hungarian Prime Minister Viktor Orbán, necessitating unanimous approval from all EU member states for a budget increase. Hungary later indicated a willingness to lift its veto, contingent on annual reviews of the funding.

To circumvent Hungary's blockade of funds for Ukraine, the European Commission resolved to reallocate €10 billion from previously "frozen" EU funds. Consequently, on February 1, the European Council unanimously endorsed the allocation of €50 billion to Ukraine through the newly established Ukraine Facility, with all 27 EU member states in support. The first tranche of €4.5 billion under the Ukraine Facility program is slated for disbursement to Ukraine in March.

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