The European Union’s finance ministers on Tuesday agreed on the EU Commission’s proposal to offer Ukraine a long-term, concessional loan worth €1 billion in macro-financial support.
The sum will be backed by a financial guarantee from the EU, and interest costs will be covered by the EU budget.
The assistance is a part of a global initiative to close Ukraine’s budget gap and prevent a financial collapse in the country’s war-torn society.
Meanwhile, Czech Finance Minister Zbyněk Stanjura said, “This will give Ukraine the required funds to cover urgent needs and ensure the operation of critical infrastructure.” Prague is holding the rotating presidency of the Council of the European Union.
However, a more comprehensive aid package of up to €9 billion supported by country guarantees from the European Union, proposed by the Commission in May and approved by EU leaders, was unable to win Germany’s approval. Berlin favours handouts over loans, claiming that the latter exacerbate Ukraine’s financial problems. It has given Kyiv a gift of €1 billion.
After settling on terms with Ukraine that included “increased openness and reporting on the use of funds,” the Commission decided to proceed with raising and distributing a smaller sum of money in July.
According to a European Union official, discussions over more help and more comprehensive plans for financing Ukraine’s rebuilding are still ongoing, and the Commission will likely propose ideas after the summer break.
