Parliament approves €18 billion loan for Ukraine for 2023

This article is brought to you in association with the European Parliament.

• Long-term loan on preferential terms and conditional on reforms 
• To cover essential public services, macroeconomic stability and rehabilitation of infrastructure 
• Predictable and continuous support for 2023 instead of ad-hoc aid 

On Thursday, MEPs approved an €18 billion loan to support Ukraine during Russia’s war against the country.

The €18 billion will cover roughly half of the estimated €3-4 billion monthly funding Ukraine needs in 2023. The money will go to supporting essential public services – such as running hospitals, schools, and providing housing for relocated people -, macroeconomic stability and the restoration of critical infrastructure destroyed by Russia, according to the Commission’s proposal. Sourced by the EU from financial markets, the loan will be disbursed in quarterly instalments, with a continuity and predictability that is essential to keep Ukraine afloat amid the war.

The loan is conditional for Ukraine. It requires reforms to strengthen the country’s institutions and prepare it both for reconstruction and its path towards EU membership. Reviewed by the Commission before each instalment, the conditions include measures for anti-corruption, judicial reform, respect of the rule of law, good governance, and modernisation institutions.

The regulation was adopted with 507 votes to 38 and 26 abstentions.

Quotes

EP President Roberta Metsola said, after the vote: “Ukraine is fighting for European values. The European Parliament and the European Union have shown remarkable solidarity with Ukraine on the humanitarian, military and financial front. Importantly, we have granted Ukraine EU candidate status.

Yesterday we launched Europe’s ‘Generators of Hope’ campaign for Ukraine to get through the winter.

Today we approved, with a large majority and at record speed, an €18 billion support package to survive the war and restore its critical infrastructure.”

Sandra Kalniete (EPP, LV), standing rapporteur for Ukraine in the Committee on International Trade, said: “Ukraine has already endured 273 days of this brutal war. Russia has violated every international law imaginable, launching 4700 rockets at Ukrainian cities and critical infrastructure, resulting in thousands of civilian deaths. Yet the Ukrainian people have never been more united and its army more motivated to continue liberating their country. Ukraine must know that it can count on European support for as long as it takes. The EU stands ready to provide regular, and predictable financial assistance to help cover a sizeable part of Ukraine’s immediate financial needs in 2023”.

Background

Since the start of the war, the EU and its member states have provided €19.7 billion to support Ukraine, a large part of which has come in the form of macro-financial assistance approved by the EP in September and July.

Next steps

The loan now has to be approved by unanimity in Council on 6 December before the Commission can tap the markets and disburse the support in early 2023.