EU Parliament Approves Multi-Billion Euro Loan for Ukraine: Details Inside

The EU Parliament has drawn a line under months of back-and-forth regarding the structure of aid to Ukraine for this year and the next: The deputies voted 458 to 140 in favor of the plans for a billion-euro loan to the country attacked by Russia. It provides up to 90 billion euros over two years for Ukraine. 60 billion of this is for defense-related expenses, with the remainder as budget support for Kyiv.

For the initial funds to be disbursed, only the approval of the Council of Member States is now required. This is regarded as a formality, as the governments have already agreed on the terms of the loan.

After tough negotiations, the EU countries last week agreed on the terms for the loan to Kyiv. There had been intense discussions among the member states about how strict the guidelines for the use of the money should be. France, in particular, pushed for very strict guidelines to support the EU’s arms industry. However, numerous other member states warned that lack of flexibility in purchasing weapons and ammunition could negatively impact Ukraine’s defense capabilities.

As a compromise, the states ultimately agreed to link the so-called Buy-European clause for the loan to the availability of weapons and ammunition in the EU. This means that Ukraine can only purchase armaments in countries like the USA with the money if they are either not available or not available in a timely manner on the European internal market and in Ukraine.

Thus, the funds could also be used for US Patriot anti-aircraft missile systems, currently considered irreplaceable in air defense.

Additionally, purchases in countries with special partnership status will be possible if they contribute to the costs of the new Ukraine loan. This clause was specifically created for the United Kingdom.

The money for the loan will be raised at favorable conditions on the capital market. Ukraine will only have to repay it if Russia makes compensation payments for the damages caused after the end of its war of aggression. Additionally, it is planned to use Russian assets frozen in the EU for repayment if Moscow does not make compensation for war damages.