09:36 10.10.2024

Council of EU agrees on up to EUR 35 bln in MFA to Ukraine using frozen Russian assets

2 min read
Council of EU agrees on up to EUR 35 bln in MFA to Ukraine using frozen Russian assets

The Council of the EU has reached an agreement on a financial assistance package to Ukraine, including an exceptional macro-financial assistance (MFA) loan of up to EUR 35 billion and a loan cooperation mechanism that will support Ukraine in repaying loans for up to EUR 45 billion provided by the EU and G7 partners, according to a Wednesday press release.

"The repayment of the exceptional MFA loan and eligible bilateral loans from G7 partners under the 'Extraordinary Revenue Acceleration Loans for Ukraine' (ERA) initiative, will be ensured by funds coming from future flows of extraordinary revenues stemming from the immobilisation of Russian sovereign assets," the Council said.

The Ukraine loan mechanism will disburse these funds – as well as possible amounts received as voluntary contributions from member states and third countries or other sources – in the form of financial support to Ukraine, to assist it in servicing and repaying the loans.

The Council of the EU recalled that the up to EUR 35 billion MFA loan is the EU's contribution to the G7 loan of up to EUR 45 billion.

"The new MFA operation will be linked to policy conditions that are consistent with the Ukraine Facility, in particular the Ukraine Plan. The management and control systems proposed under the Ukraine Plan and specific provisions on the prevention of fraud and other irregularities will also apply to the MFA loan," the Council said.

In view of a speedy adoption and ensuring that the macro-financial assistance reaches Ukraine as soon as possible, member states agreed today that if the European Parliament adopts the European Commission's proposal without changes, the Council will also proceed to adopt the text without modifications.

"The Council plans to adopt the regulation by written procedure after the European Parliament has adopted the text in first reading. The regulation is expected to enter into force on the day after its publication in the Official Journal of the EU," the Council said.

The aim is to make the MFA loan available in 2024, with disbursement in 2025, to be repaid over a maximum period of 45 years.

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