On Friday 28 June, the European Commission disbursed almost €1.9 billion in pre-financing to Ukraine under the ‘Ukraine Facility’, the budgetary instrument of the European Union’s macrofinancial assistance to the country, which will be worth a total of €50 billion between now and 2027 (see EUROPE 13344/18).
This pre-financing represents an advanced disbursement of 7% of the loan support that Ukraine is eligible to receive under the Ukraine Facility to support the implementation of the Ukraine Plan.
“The new funding will support Ukraine’s macro-financial stability as it implements critical long-term structural reforms under the Ukraine Plan, Ukraine’s reform and growth plan for the next four years, which has been positively assessed by the Commission and the EU Council”, said the European Commission in its press release (see EUROPE 13407/3).
This brings to €7.9 billion the total of EU pre-financing already transferred to Ukraine since the Facility became operational in March. According to the European Commission, conditional on Ukraine meeting pre-agreed requirements, payments will now be made on a quarterly basis.
Loans agreed at G7 level. On Thursday, the European Council asked the European Commission, the High Representative of the Union for Foreign Affairs and Security Policy and the Council of the EU to “take work forward” to implement “by the end of the year”, the decision taken by the G7 countries to grant, from 2025 onwards, loans of up to $50 billion, which would be pledged against the profits generated by the assets of the Bank of Russia (see EUROPE 13433/23).
The Member States have not yet decided on the contours or scale of the EU’s macrofinancial assistance (potentially 50–60% of the total?), which would require a qualified majority of Member States to adopt. In particular, there is the question of how to share the risks given that the vast majority of the assets tied up are in Belgium, and Europeans only want to guarantee their own loans. Another issue is how long the immobilised assets will be kept, given that EU sanctions are periodically renewed and the duration of the war remains unknown.
At the European summit, Belgium called for “all relevant legal and financial aspects” in the dossier to be studied.
This addition to the European Council’s conclusions demonstrates that some countries have “concerns”, a European diplomat said on Friday, while not ruling out “a difficult debate” between the Member States under the Hungarian Presidency of the EU Council. According to this source, the leaders of Hungary and Slovakia then followed suit by voicing their doubts about this instrument.
“The countries that are ‘friends of Ukraine’ may have underestimated the impact that the amendment” requested by Belgium “could have”, a European diplomat noted. (Original version in French by Camille-Cerise Gessant and Mathieu Bion)