The European Union on Wednesday pledged about €18 billion ($18 billion) in regular payments next year to help the war-torn country maintain energy and health facilities and fund salaries and pensions. announced plans to provide aid to Ukraine scheme.
The European Commission, the EU’s executive branch, said the aid would include highly favorable loans worth about 1.5 billion euros each month and would probably start in January. Ukraine will not have to repay the funds for at least 10 years and EU member states will bear the interest costs.
The International Monetary Fund estimates that Ukraine will need between $3 billion and $4 billion per month in 2023. Her EU contribution of 27 countries rivals that of the US, with other donors and financial institutions expected to fill the gap.
“Ukraine needs our help,” said European Commission Vice-President Valdis Dombrovsky when announcing the plan. He said the Kyiv government needed “stable and predictable” funding. At the same time, the EU expects her EU to tackle fraud and corruption and strengthen the rule of law.
The commission intends to borrow money in the capital markets using the combined weight of 27 countries to secure more favorable terms. Part of the effort includes restructuring part of the EU’s long-term budget, which requires the unanimous approval of Member States.
Dombrovskis asked EU countries and the European Parliament to approve the plan by the end of the year so that the first loans could be provided in January. “Decisions need to be made quickly, and with 2023 fast approaching, Ukraine’s funding needs are urgent,” he said.
The EU has been accused of being too slow in funding Ukraine, despite allocating more than €19 billion to it since Russian forces invaded in February.
Hungarian Foreign Minister Peter Sijart said this week that his government will continue to provide financial assistance on a bilateral basis but oppose allowing the EU to get credit to help Ukraine.Dombrovskis said it would work with Hungary to try to overcome its opposition.
The EU will provide Ukraine with another €2.5 billion this month and another €500 million in December.