EU Approves €1 Billion Loan for Ukraine

The European Council on Tuesday approved an additional €1 billion loan to Ukraine “as a matter of urgency” and pledged to provide Kiev with more help “in the coming months.”

According to the council’s statement, the total macro-financial support from the EU to Kiev since the end of February, when Moscow launched its military operation in the neighboring country, has now reached €2.2 billion.

The loan is supposed to “give Ukraine the necessary funds to cover urgent needs and ensure the operation of critical infrastructure,” Czech Finance Minister Zbynek Stanjura said.

The Czech Republic currently presides in the EU Council.

European Commission Executive Vice President Valdis Dombrovskis hailed the decision, saying that as “Ukraine is an economy at war,” it “badly needs” short-term assistance.

“The EU is there to help,” Dombrovskis wrote.

The European parliament approved the allocation of funds on July 7.

The aid will be released once a memorandum of understanding is agreed on with the Ukrainian authorities.

The loan is a part of the “highly concessional” long-term loan package that the European Commission proposed on May 18. The €9 billion would “top up the significant short-term relief provided until now, with a new exceptional macro-financial assistance” for Ukraine, European Commission President Ursula von der Leyen explained at the time.

However, according to Corriere della Sera, for more than a month, Germany has been blocking the aid package.

German Finance Minister Christian Lindner does not like the fact that Brussels is offering to fund aid to Ukraine from the common European debt, the Italian outlet claims, adding that for now, Berlin has only agreed to approve a €1 billion tranche.

Ukrainian Finance Minister Sergey Marchenko, in an interview with Corriere della Sera on Monday, confirmed that EU members are at odds over how they should support Ukraine, and that some of them believe €9 billion is too much.

Marchenko also said that while Ukraine needs €5 billion ($5.05 billion) every month, Kiev has been receiving much less so far. These comments come after he announced in mid-May that Ukraine may have to resort to “painful” measures to save the economy amid the conflict with Russia. At the time, he warned that the government might have to raise taxes, cut spending, and nationalize certain businesses.

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