EU member states approved a new package of sanctions against Russia and unlocked €90bn in funding for Ukraine, with disbursements expected to begin by June at the latest.
Nikolaj Nielsen
EU member states approved a new package of sanctions against Russia on Thursday (23 April) and unlocked €90bn in funding for Ukraine, with disbursements expected to begin by June at the latest.
The decision comes at a critical time for Ukraine after months of doubt, following Hungary’s veto under the leadership of its now-ousted pro-Kremlin prime minister Viktor Orbán.
Both the sanctions package and the loan, spread out over two years, were adopted unanimously.
Ukraine would only have to pay back once they get reparations from Russia with some €60bn geared towards military support and the remaining €30bn to help shore up Ukraine’s budget.
The EU would seek contributions from member states if Russia fails to pay, with Hungary, Slovakia and the Czech Republic exempt from any such requests.
“Our working hypothesis is that Russia should pay for the damage it has caused in Ukraine,” a European Commission official said, adding that no repayment timeline has been set once the funds are disbursed.
The loan will be financed through EU borrowing on capital markets, backed by the budgetary headroom available under the current EU’s long-term budget.
Kyiv is hoping the first tranche arrives as early as next month, with the money earmarked for domestic arms production and the procurement of weapons not manufactured in Ukraine.
“This package will strengthen our army, make Ukraine more resilient, and enable us to fulfill our social obligations to Ukrainians,” said Ukraine’s president Volodomyr Zelensky.
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Some €45bn is foreseen until the end of 2026 and the other €45bn would be reserved for 2027, although this could be revised in case of need.
It means the €45bn package has been further divided into €16.7bn for budget support and €28.3bn for defence.
The budget support component is further split into two equal tranches of €8.35bn, allocated through the Ukraine Facility, a support fund to help the country join the EU, and via macro-financial assistance.
The macro-financial assistance will be paid out in three instalments: €3.2bn, €3.7bn and €1.45bn over this year.
