The European Parliament gave the green light this Tuesday to loan of 35 billion euros for Ukraine, a financing that is part of the agreement forged within the framework of the G7 and that amounts to up to 50,000 million dollars (about 45,000 million euros) that will come from the benefits generated by the assets frozen to Russia.
The plenary session of the European Parliament in Strasbourg has endorsed, with 518 votes in favor, 56 against and 61 abstentions, a new line of microfinance aid to Ukraine to face military invasion initiated by Russia almost three years ago. This is the penultimate step of the community approval process, which now depends on the adoption by the EU Council of the regulation by written procedure. The economic allocation will be provided until the end of 2025.
“Russia will pay for the damages of the war in Ukraine. And they know that we have two main objectives: the fight against impunity, on the one hand; and the certainty that “Russia will pay for the damage caused by the aggression against Ukraine,” the Commissioner for Justice, Didier Reynders, indicated in a debate in the European Parliament. Funding could be available to kyiv by the end of the year to contribute to its military budget.
Since the beginning of the war, the Belgian explained, the EU countries have disbursed more than 120 billion euros to Ukraine. Furthermore, he has considered that this economic support is “urgent” and “critical” since kyiv’s financing deficit could rise by 15.6 billion dollars in 2025, up to 41.5 billion, he said, recalling figures from the International Monetary Fund.
This loan of 35 billion euros is part of the agreement reached between the G7 partners to provide Ukraine with aid of 50 billion dollars (45 billion euros). The block’s endowment, however, could be reduced depending on the final contribution of the rest of the G7 partners. The aid is part of the Loan Cooperation Mechanism to Ukraine, made up of assets that have frozen assets to the Russian Central Bank in different countries, and with which kyiv will finance these loans granted by the G7.
In the EU alone the assets frozen to Russia amount to 210,000 million euros, the bulk of them in the Belgian clearing system, Euroclear. The Twenty-Seven agreed to allocate the profits generated by these assets to military support and the reconstruction of Ukraine.
The processing of the proposal has not been without controversy on the part of Hungary, which once again staged another blockade alone. Although Budapest ended up approving the financial allocation, it did not raise the veto to change the renewal period of sanctions from six months to three years to frozen Russian assets.
Financing for Ukraine will depend, in any case, on kyiv fulfilling certain commitments such as maintaining effective democratic mechanisms and respect human rights. In addition, the financing will be subject to fraud prevention control mechanisms to avoid irregularities.
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