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European Union. European Commission

EU to Provide Ukraine with Up to $39 Billion Loan

Strategic Insights

— 2 min read

European Commission President Ursula von der Leyen announced Friday that the European Union will provide a loan of up to 35 billion euros (about $39 billion) to Ukraine, backed by the windfall profits from frozen Russian assets. The loan will flow straight into Ukraine's budget, with von der Leyen stating that it is a huge step forward and that the EU should make Russia pay for the destruction it caused. The European loan is smaller than the $50 billion agreed under the G-7 plan but will provide relief to Ukraine, helping to plug an expected budget gap of at least $35 billion for next year.

Key Takeaways:

  • The European Union will provide a loan of up to 35 billion euros (about $39 billion) to Ukraine, backed by the windfall profits from frozen Russian assets.
  • The loan will flow straight into Ukraine's budget, as stated by European Commission President Ursula von der Leyen.
  • The loan is a huge step forward in helping Ukraine address its financial needs, created by the ongoing war.
  • The European loan is smaller than the $50 billion agreed under the G-7 plan but will still provide relief to Ukraine.
  • The loan requires approval from a majority of the 27-nation bloc and from the European Parliament by the end of the year.
  • Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, described the European move as a "big deal" because it takes the reins of a plan intended to involve the United States and other contributors.
  • The move sent a message to Ukraine that the EU has its back and could be an effort to shield against political winds of change in Washington.
  • The European loan is an insurance against future hiccups, such as congressional delays.

Statistics:

  • Up to 35 billion euros (about $39 billion) will be loaned by the European Union to Ukraine.
  • The loan is backed by the windfall profits from frozen Russian assets.
  • The loan will flow straight into Ukraine's budget.
  • The European loan is smaller than the $50 billion agreed under the G-7 plan.
  • The loan will help plug an expected budget gap of at least $35 billion for next year.
  • The loan requires approval from a majority of the 27-nation bloc and from the European Parliament by the end of the year.
  • The United States will seek safeguards to ensure it won't be left on the hook for loans if EU sanctions are loosened.

Sources:

  • Reuters, "EU to provide $39 billion loan to Ukraine backed by frozen Russian assets", accessed Friday.
  • The Guardian, "EU agrees to provide €35bn loan to Ukraine backed by frozen Russian assets", accessed Friday.
  • Peterson Institute for International Economics, Jacob Kirkegaard, "The EU's Move to Loan Ukraine Up to $39 Billion", accessed Friday.

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