The Commission welcomes the consensus reached by the EU and G7 partners to collectively provide loans for €45 billion to support Ukraine’s urgent budgetary, military and reconstruction needs (approximately $50 billion USD). This confirms that the EU and G7 partners fulfil the commitment they made in June at the Apulia G7 Leaders’ Summit. These loans will be serviced and repaid by future flows of extraordinary revenues stemming from the immobilisation of Russian Central Bank assets. This achievement underscores the unwavering commitment of the EU and its G7 partners to support Ukraine in its fight for its freedom, recovery and reconstruction.
An EU mechanism for the repayment of the loans
The consensus amongst G7 members was facilitated by the EU’s creation of the Ukraine Loan Cooperation Mechanism. This mechanism, recently endorsed by co-legislators following a proposal of the Commission, will receive extraordinary revenues stemming from the immobilisation of Russian sovereign assets and other voluntary contributions made by Member States or third countries. These resources will then be distributed to Ukraine to repay the principal and interest on eligible bilateral loan agreements with lenders under the G7 ‘Extraordinary Revenue Acceleration (ERA) Loans for Ukraine’ initiative.
To ensure that Ukraine would receive the full amount of financing committed by G7 Leaders, the EU showed leadership by providing the authorisation to contribute to this initiative with an exceptional EU macro-financial assistance (MFA) loan of up to €35 billion.
In light of the confirmed contributions of G7 partners, ensuring support proportionate to the size of their respective economies, the EU expects to provide an MFA loan of approximately €18 billion as its contribution to the ERA initiative. Through this new exceptional MFA operation, that is additional to the support provided by the EU under the €50 billion Ukraine Facility, Ukraine will be able to benefit from predictable, continuous, orderly and timely support that will contribute to cover a sizeable share of Ukraine’s budgetary needs.
Source: European Commission
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