The Commission is proposing €18 billion in aid to Ukraine for 2023
On Wednesday (9 November), the European Commission released details of a €18 billion economic aid package intended to help Ukraine until 2023, hoping it will soon be approved by EU member states.
Under this plan, the EU would send Kyiv 1.5 billion euros a month in 35-year loans, the interest on which would be borne by the Union, to support the Ukrainian government in the face of the Russian invasion.
«We present this new financial package for Ukraine at a time when the country is in dire straits as relentless Russian attacks continue to erode critical infrastructureCommission Vice-President Valdis Dombrovskis to reporters in Brussels.
«Our financial support must be stable, structured and predictable“, he added.
The loan program has yet to be approved by EU member states, some of which are skeptical about taking on Ukraine’s mounting debt.
Mr Dombrovskis called on member states and the European Parliament to approve the plan before the end of the year in order to make the first payments next January.
«The decision must be made quickly, the year 2023 is fast approaching and Ukraine’s financing needs are urgent‘ he explained.
EU leaders are expected to meet at a regular summit on December 15-16 to take stock of steps taken this year and discuss continued support for Ukraine.
Finding a consensus could prove more difficult than expected, however, as Hungarian Foreign Minister Peter Szijjarto said earlier this week that while Budapest intends to continue providing financial support on a bilateral basis, it opposes the EU lending to support the record Ukraine.
Dombrovskis said he would work with Hungary to resolve the objections raised.
Ukrainian Prime Minister Denys Shmyhal called the proposal “very important initiative that will support the economic stability of our state and strengthen the foundations for our future victory».
«These funds will make it possible to cover a significant part of the budget deficit, which amounts to $38 billion.“, he added.
The EU has already given Ukraine €4.2 billion in macro-financial assistance this year and plans to disburse another €2.5 billion by the end of the month.
In May, the European Commission announced macro-financial assistance to Ukraine of up to €9 billion, but EU member state governments have yet to agree on how to fund the full amount of that sum.
Due to the slow delivery of this aid, the Ukrainian government has had to resort to monetary financing, thus printing its own currency to fund the war effort. If this strategy is overused, it can lead to runaway inflation and make it difficult for the Ukrainian government to fund the war.
However, according to the International Monetary Fund (IMF), Kyiv will need €3-4 billion a month over the next year to keep public services running while battling the Russian invasion, which now occupies almost a fifth of its territory.
Brussels hopes that Washington and other major international donors will do their part to bring aid to the required level.
«We will ensure that Ukraine emerges from this war as a prosperous country on the road to European integration. We will stand by Ukraine for as long as it takessaid EU Commission President Ursula von der Leyen.
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