On Tuesday 8 October in Luxembourg, the Hungarian finance minister, Mihály Varga, confirmed that the Hungarian Presidency of the Council of the European Union aims to reach a political agreement on the creation of new macrofinancial assistance (MFA) to Ukraine of up to €35 billion (see EUROPE 13487/1).
“The Hungarian Presidency has put a lot of effort into pushing forward the technical discussions in the Council”, said Mr Varga of this new aid, which will be the European contribution to the G7 countries’ decision to grant loans to Kyiv backed by future profits generated by the Bank of Russia’s assets frozen in the EU. He announced the Hungarian Presidency’s intention to reach an agreement, by a majority of Member States, at the meeting of Member States’ ambassadors to the EU (Coreper).
The agreement will cover three texts of the legislative package put forward at the beginning of September, which will enable the EU’s macrofinancial assistance and the Ukraine Loan Cooperation Mechanism (ULCM) to be put in place. This mechanism will enable Ukraine to repay bilateral loans taken out with the EU and G7 countries.
According to our information, the Council and the European Parliament, which are due to vote on the legislative package at the end of October, have decided to move quickly, without changing the substance of the texts.
Summing up the ministerial debate, the European Commissioner for Economy, Paolo Gentiloni, noted “strong support” from EU countries for the legislative package, which comes at “a critical moment”. Ukraine is preparing for a difficult winter due to the destruction of its infrastructure by the Russian army, he stressed.
However, there was not the unanimity required in the Council on the proposal to extend, from 6 to 36 months, the duration of sanctions against Bank of Russia assets frozen in the EU. Mr Gentiloni, who reported that the Member States were “virtually unanimous” in their support for the proposal, pointed out that the proposal was “a precondition” laid down by the United States for participation in the G7 initiative.
Mr Varga felt that, as far as Hungary was concerned, the question of the duration of sanctions would have to be decided “in November”, once the US elections had delivered their verdict and indicated which direction - “peace or prolonging the war” - the future US administration would take.
A refusal by the United States to grant a new loan to Ukraine would mean that the EU’s financial contribution would remain high. It is for this reason that, during the debate at the Ecofin Council, several ministers insisted on the importance of a “fair sharing of the [financial] burden”, noted Mr Gentiloni. (Original version in French by Mathieu Bion)