The Council of the EU adopts additional € 5 billion of macro-financial assistance to Ukraine
The Council of the European Union has officially adopted an additional 5 billion euros in macro-financial assistance (MFA) for Ukraine. The MFA will support the country in humanitarian, development, customs and defence fields.
The financial aid is on top of the €10 billion the EU has already provided in financial, humanitarian and military aid. The amount will be disbursed in the form of loans to Ukraine 'as the second part of the exceptional package' announced by the Commission last 18 May and endorsed by the European Council on 23-24 June 2022 (the package provides for assistance of up to 9 billion euros).
Commission President Ursula von der Leyen commented her executive's proposal earlier in September: “Ukraine must win this war: it must regain the freedom and independence it is so courageously fighting for. The EU will continue to do its part to make sure this happens – solidarity will prevail, and peace will come.”
The Czech Presidency of the Council announced today that at the next Ecofin meetings it will push for "a swift agreement on the provision of the remaining €3 billion, for which we must also agree on the division of this amount into loans and grants".
The funds, borrowed by the Commission on capital markets, are available to Ukraine in the form of long-term loans on favourable terms, and will be provided in periodic payments. The loans to Ukraine will be backed by guarantees provided by Member States which will complement the provisioning available from the EU budget. Between the EU budgetary provisions and the Member State guarantees, the loans will be fully secured for 70% of their value.
This money actually serves to ensure the survival of the Ukrainian state, which, deprived of its income, still has to pay salaries and buy necessary goods. According to a recent estimate by the International Monetary Fund, Kyiv would need 5 billion dollars a month to stay afloat, a figure which the Ukrainian President Volodymyr Zelensky has increased to 7 billion, and which in any case does not include the costs to be borne at the end of the conflict.
The EU is also continuing to support Ukraine in the military field with an instrument called the European Peace Facility, which despite its name provides weapons, equipment and war training to various countries around the world. The contribution so far amounts to 2.5 billion euros, it also includes protective equipment for Ukrainian soldiers, fuel for their vehicles and 'military equipment designed for the lethal use of force for defensive purposes'.