The EU takes out a loan to send money to Ukraine

Based on the guarantees provided by the EU countries and according to the latest proposal of the European Commission, the European Union would disburse a maximum of 5 billion euros as a long-term loan to Ukraine. The EU would support the interest payment from the European Union budget.

However, the remaining amount, about 3 billion euros, would already be provided as support, wrote the Politico.

The new proposal came about after Germany refused to provide a guarantee to Ukraine for the previously planned loan amount of 9 billion euros. Berlin argued that, compared to loans, grants are more suitable for helping Kyiv, which is already heavily indebted, and cited as an example the fact that Germany has not given a loan, but rather a grant of one billion euros to Ukraine.

This position raised questions in Italy and France, which had also previously provided financial support to Ukraine, so the European Commission renegotiated the matter.

Although there is no timetable yet, the European Commission aims to get the approval of the European Parliament and EU member states in September so that disbursements can begin in October.

All this despite the fact that Ukrainian President Volodymyr Zelenskiy recently scolded the European Union for delaying sending money to Ukraine.

The background to this is that in May, the leaders of the EU promised Kyiv financial support of up to 9 billion euros to be sent to Ukraine. So far, the European Commission has been able to disburse a loan of one billion euros from this amount to Ukraine, as the EU budget provided cover for this.

Since the Russian invasion, Ukraine has had a budget deficit of around 5 billion dollars a month, so the Ukrainian president is waiting for money from international donors so that Ukraine can pay pensions and public sector wages from the incoming funds.

Every day I remind the leaders of the European Union in several ways that Ukrainian pensioners, displaced people, our teachers and other people who depend on budget payments cannot be held hostage by the indecision of the EU leaders or their bureaucracy. Artificially delaying financial aid to Ukraine is either a crime or a mistake, and it’s hard to say which is worse in the midst of a war that has reached its peak

– said Zelenskiy, referring to the 8 billion euros to be transferred from the 9 billion euros.

The European Commission, meanwhile, has run into walls on how to finance the 70 percent guarantee it needs to obtain funds (take out loans), since its own budget has already been exhausted.

Index also continuously follows the events of the Russian-Ukrainian war, our Friday live news feed can be accessed by clicking here.

(Cover photo: Volodymyr Zelensky on July 28, 2022. Photo: Sergei Supinsky / AFP)

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