Strasbourg, 22 October 2024
On Tuesday, MEPs gave their green light to an extraordinary loan of up to €35 billion to Ukraine, to be repaid with future revenues from frozen Russian assets.
With 518 votes in favour, 56 against and 61 abstentions, Parliament endorsed the new macro-financial assistance (MFA) to help Ukraine against Russia’s brutal war of aggression. This loan is the EU’s part of a G7 package agreed last June, to provide up to $50 billion (approximately €45 billion) in financial support to Ukraine. The final amount that the EU will contribute could be lower, depending on the size of the loans provided by other G7 partners.
The Ukraine Loan Cooperation Mechanism, a newly established framework, will make future revenues from the frozen Russian Central Bank assets located in the EU available to Ukraine. These funds will help Ukraine service and repay the EU’s MFA loan as well as loans from other G7 partners. While the mechanism’s funds can be used to service and repay loans, Kyiv may allocate the MFA funds as it sees fit.
The new MFA funds will be disbursed until the end of 2025. The loan is conditional upon Ukraine’s continued commitment to uphold effective democratic mechanisms, respect human rights, and further policy conditions to be set out in a memorandum of understanding. Additionally, the management and control systems outlined in the Ukraine Plan, along with specific measures to prevent fraud and other irregularities, will apply to the MFA loan.
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“Ukraine continues to resist Russian aggression, with its brave citizens fighting not only for their own existence and freedom, but to defend democracy, human rights, freedom, and international law for all of us. The need for financial support is both immense and urgent. Russia must pay for attacking Ukrainians and brutally destroying the country’s infrastructure, cities, villages, and homes. The burden of rebuilding Ukraine will be shouldered by those responsible for its destruction, namely Russia,” rapporteur Karin Karlsbro (Renew, SE) said.
Next steps
EU governments already endorsed the proposal, and the Council plans to adopt the regulation by written procedure after Parliament’s vote. The regulation will enter into force on the day after its publication in the Official Journal of the EU.
Background
In September, the Commission announced a €35 billion EU loan for Ukraine as part of a plan by G7 partners to issue loans of up to $50 billion (about €45 billion). Future revenues coming from the frozen Russian state assets would finance the loans. Approximately €210 billion in assets from the Central Bank of Russia are held in the EU and remain frozen under sanctions imposed over Moscow’s invasion of Ukraine in February 2022. EU governments decided to set aside the profits from these assets, and use them to support both military efforts and reconstruction in Ukraine.
Further information
S&Ds back new Ukraine aid package, funded by profits from frozen Russian assets
Today, the S&D MEPs vote in favour of the new aid package for Ukraine, enabling a Ukraine Loan Cooperation Mechanism of up to €45 billion and an exceptional Macro-Financial Assistance (MFA) loan of up to €35 billion. This is a much-needed step to help Ukraine rebuild its infrastructure, stabilise its economy, and continue its fight for freedom.
With winter approaching and Russia intensifying attacks on Ukraine’s critical infrastructure, the urgency of providing financial support cannot be overstated. The S&Ds emphasise that swift and continued EU action is essential for both immediate relief and to meet the end-of-year deadlines.
The new mechanism, initiated by the G7 last June, provides loans funded by extraordinary profits from immobilised Russian assets. This unprecedented collaboration between G7 partners and the EU is designed to support Ukraine’s recovery, ensuring that those responsible for its destruction bear the costs of its reconstruction.
Brando Benifei, S&D coordinator in the INTA committee and negotiator on this file, said:
“This new aid package is yet another tool by the EU and G7 partners to demonstrate effective solidarity with Ukraine. It is a clever instrument, with adequate safeguards for the EU budget and a structure that ensures resources are spent exclusively on the intended purposes of macroeconomic stabilisation and the preservation of Ukraine’s critical infrastructure.
“Most importantly, it is also a just instrument, utilising windfall profits from frozen Russian assets. After all, the costs of Russia’s aggression should be borne by Russia itself, not by European citizens.
“Next, it is up to the member states to extend and renew the sanctions on Russia. I especially urge Hungarian Prime Minister Viktor Orbán to stop playing games and prioritise the future of European citizens before it results in extra costs for all of us.”
Source – S&D Group (by email)
Renew Europe on the endorsement of macrofinancial support for Ukraine: A decisive step forward to make Russia pay for its aggression
Strasbourg, 22 October 2024
Renew Europe welcomes the broad support of the European Parliament for the exceptional macro-financial assistance loan to Ukraine (MFA) of up to €35 billion euros. This loan will contribute to the establishment of the Ukraine Loan Cooperation Mechanism (ULCM) of €45 billion euros (50 billion $). This new mechanism, drawn up at G7 level, is exceptional in that the loans from the EU and other G7 contributors will not be repaid by Ukraine but by windfall profits coming from the frozen assets of Russia.
Renew MEP Karin Karlsbro (Liberalerna, Sweden), acting as the European Parliament rapporteur on this file has ensured that the European Commission’s proposal has been adopted swiftly and unamended, so that Ukraine can benefit from this exceptional assistance before the end of 2024. The intensification of the Russia’s attacks increases the need to support Ukraine financially.
The G7 support for the successful implementation of this mechanism depends on the prolongation of the sanctions against Russia and extending the immobilisation of Russian assets. In this regard, Renew Europe deplores once again the obstruction of Hungarian Prime Minister Viktor Orbán, who opposed the proposal to renew the freeze on Russia’s € 210 billion sovereign assets for a period of 36 months, instead of 6 months. This option, also supported by the United States, would have provided Ukraine with the stable assistance it needs to counter Russian aggression. Once again, Orbán’s regime is showing who its true allies are.
Speaking ahead of this morning’s vote on behalf of the Renew Europe group, Karin Karlsbro said : “Since the first day of Putin’s war it has been clear, that one day Russia must pay for the destruction of the Ukrainian society. Today the European Parliament can make it happen. By using the windfall profits of the frozen Russian assets – we can send up to 45 billion euros to Ukraine. It is time to make Russia pay for its attacks on Ukrainian society and the brutal destruction of infrastructure, cities, villages, and homes. The burden of rebuilding Ukraine will be shouldered by those responsible for its destruction, namely Russia”.
Source – Renew Europe (by email)
ECR Group: Russia must lose the war and pay the price
The ECR strongly supports the Ukraine loan cooperation mechanism and the exceptional macro-financial assistance. The Group urges the EU to continue with further sanctions against Russia and not to relax its international diplomatic efforts in support of Ukraine.
Commenting on the new aid mechanism, ECR Shadow Rapporteur Rihard Kols said:
“This is a crucial step, yes—€35 billion to help stabilise a war-torn economy is no small feat—but the goal of this mechanism is not in the plan itself, but in its implementation.”
According to Kols, Russia started the war and must pay the price: “The aggressor must not only lose, but also pay. The use of immobilised Russian assets as collateral is a bold statement that Russia should take note of.” But the EU should not stand still: “With this mechanism in place, we need to create a framework to seize frozen Russian assets and impose sanctions not every six months, but until Russia fully withdraws from Ukraine and pays reparations,” he added.
At the same time, however, he warned the EU not to let up in its foreign policy support for Ukraine:
“We must not only provide financial assistance, but also confront the international dynamics that threaten Ukraine‘s sovereignty. At the moment, Ukraine faces two nuclear powers as belligerents on its soil.
“Reagan warned us: ‘Freedom is never more than one generation away from extinction. We must safeguard Ukraine’s freedom today, or we shall spend our lives recounting stories about what it was like when nations were free”, he concluded.
Source – ECR Group (by email)