On Feb. 1 all 27 EU leaders agreed on vital aid for Ukraine totaling €50 billion ($54 billion) at an extraordinary summit in Brussels. The funding deal is set to cover the period 2024-2027.
A major deal with compromises
“We have a deal,” European Council President Charles Michel announced on X, heralding the unanimous decision of EU leaders that ended more than a month of uncertainty due to opposition by Hungary`s Prime Minister Viktor Orban.
Agreement was reached “quickly,” as Orban finally succumbed to pressure following a series of meetings with the Italian, French and German leaders, along with the EU leadership, just before the summit, Michel’s spokesperson confirmed.
However, there were compromises. In two years, there may be a European Commission proposal to review the funding agreement in the context of EU budget arrangements.
Orban also declared “mission accomplished,” with Budapest given a guarantee that the European Commission will evaluate the rule of law in Hungary fairly and objectively.
First tranche of funding set for March
Shortly after the EU’s decision, Ukraine`s Ministry of Economy released a statement that Kyiv “expects to receive the first tranche of €4.5 billion in March.”
In late February, the €50 billion aid agreement must pass through the European Parliament so that MEPs can check all the details carefully.
“EU leaders just approved an idea without any technical details, and the adoption [of financial aid for Ukraine] will be in late February,” Roksolana Pidlasa, head of the budget committee of Ukraine's parliament told Kyiv Post.
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According to Pidlasa, no difficulties are expected with the aid package.
Kyiv expects to receive €18 billion during 2024
“The Ukrainian government is holding negotiations [with EU representatives], and we have cautious optimism that the first €18 billion will be provided to Ukraine in 2024,” Pidlasa said.
The sum is important for Ukraine to top up its budget deficit, after setting aside $47 billion (22 percent of the country’s GDP) for defense spending. This year's social spending alone amounts to Hr.469 billion ($12.5 billion), equating to about a quarter of the €50 billion aid amount.
“Only €39 billion (or about 75 percent) of the €50 billion will be directed to the national budget as direct budget aid. This money will go to the budget’s general fund and will be used as in the previous year for various social and humanitarian spending: pensions, social payments, salaries for doctors and teachers,” Pidlasa explained.
She added that Ukraine may have some recommendations for the European Commission on certain needs which should be covered by this money.
The small print
In summer 2023, the European Commission proposed a new investment plan, the Ukraine Facility, to provide predictable financial support for Ukraine over the 2024-2027 period. The Facility aims “to cater both for short-term State and recovery needs and the medium-term reconstruction and modernisation of Ukraine.”
A draft of the Plan was approved by Ukraine's government late last year, with the European Commission subsequently able to provide its suggestions, including final conditions and a tranche schedule.
The Ukraine Facility makes it clear that EU aid will be provided to Ukraine in the form of grants and loans.
According to European Commission Q&A, the facility is “aiming to provide at least €2.5 billion as an annual indicative amount [that] will cater for the grant part as well as provisioning for guarantees.”
Pidlasa confirmed that the main body of the €50 billion aid amount to Ukraine will be in the form of loans.
“At the same time, the EU provides us with non-refundable aid [grants] to cover interest on the loans. So the money is free for use, but will have to be returned,” the head of the budget committee said. She added that Kyiv will return all of the €50 billion aid.
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Comments (2)
@db, You nailed it DB. Whether he resides as a russian spy in the US or is a MRGA cult American traitor ARKLAHOMBOY is solely a promoter of putin's propaganda. He comes to this Ukraine supportive site as a paid employee solely to convince folks to stop supporting Ukraine. What a loser.. he achieves the opposite on this strongly Ukraine supportive site.
This has been a spectacularly productive week in regards to Ukraine support: Besides Ukraine's amazing military achievements this week the allies have also stepped up their support a notch. EU sidelined putins' friend Orban and came through with another $54 Billion, UK and other commonwealth countries are doubling down on their military support.
Even as the USA continues to navigate around its MRGA dispora in their GOP House (& Senate), numerous countries are taking the USA up on its request to supply fully functioning weaponry which is being upgraded with new USA purchased weaponry: Canada up to 83,000 old stock surface to Air missiles, Kuwait 146 upgraded M84 & T-72 tanks, Croatia 2 military transport planes, Ecuador artillery and other weapon systems Ukrainians are asking for.
This is a wise strategic maneuver by the Biden & allied governments to quickly bring lots of useful weaponry to Ukraine. Domestic unrest is also rising inside of russia ... lots of different fronts. Ukraine military support and its wise use in the destruction of key russian targets is gaining steam.
@ArklahomBoy, Oh what will change is russia will collapse. Finally unburdened by putler's decades of cyber crime. political meddling, border destabilizing and dissent / fake news sowing hybrid war attacks, the democratic world will move forward with more benevolent undertakings.
Ukraine will rebuild and as part of the strong EU and NATO families will prosper in the absence of future fear from their neutered evil arch enemy russia. Its all moving in the right direction for Ukraine.
Not so good for putters evil regime though. I wonder how putler will be taken out.....by his own rioting people, or will he take the Hitler suicide approach as the bunker walls close in.