Nicosia, Cyprus. Cyprus Finance Minister Makis Keravnos said the Council of the EU has approved the remaining legislation needed to allow the disbursement of €90 billion in European Union loans to Ukraine. He said Cyprus “worked tirelessly” to ensure the elements required for the loan were in place.
EU legislation enables borrowing and budget guarantees
Keravnos said the council “approved the final element needed” to allow for the disbursement, adding that funds would “start flowing as soon as possible” to provide “vital support for Ukraine’s most pressing budgetary needs.” He also said the EU remains steadfast in its support for Ukraine’s sovereignty and territorial integrity.
The laws approved on Thursday involved changes to the EU’s multiannual financial framework for 2021 to 2027, allowing the EU to finance the loan by borrowing on capital markets and to guarantee that budget through what the council described as “EU budget headroom.”
With the legislation approved, the Ukrainian government is expected to begin receiving funds before the end of June at the latest.
Conditions and allocation of funds
The council said the loans will help cover Ukraine’s most urgent budgetary and defence industrial capacity needs this year and next year, with allocations made “within a robust and conditional framework.”
Keravnos said funding will be linked to strict conditions on Ukraine’s side, including adherence to the rule of law and efforts to fight corruption.
According to the council, one third of the €90 billion will constitute macroeconomic support that can be used to address Ukraine’s most urgent budgetary needs. The remaining two thirds will be allocated to bolstering Ukraine’s capacity to invest in defence industrial capacities, including procurement of defence products.
What do you think the EU’s conditions on the funding will mean for Ukraine’s budgetary and defence spending?
