In the wake of the European Council’s decision to grant Ukraine a two-year, €90 billion loan from the European Union budget (see EUROPE 13776/1), the procedure for implementing this financial operation was clarified on Friday 19 December.
Granting such a loan is in itself a mechanism well known to the institutions of the European Union. The Member States will have to decide unanimously to amend the regulations of the Multiannual Financial Framework (MFF) in order to authorise the EU to provide a loan to Ukraine, as has already been done in 2018 and 2024. Considered impossible until the final hours of the European Summit, this possibility became a reality once the leaders of Hungary, Slovakia and the Czech Republic had given their approval.
The novelty of the future loan lies in the fact that not all Member States will take part in the operation and will not suffer the financial impact. Hungary, Slovakia and the Czech Republic have opted out. Such a situation therefore calls for action under the mechanism of enhanced cooperation (Article 20 TEU), which has already been tried and tested in the judicial field (divorce, creation of the European Public Prosecutor’s Office).
Meeting on Friday, the Member States’ ambassadors to the EU (Coreper) were invited to ensure the follow up of the European Summit. They will have to establish that the conditions for launching enhanced cooperation have been met, in particular that at least nine Member States are prepared to provide new macro-financial assistance to Ukraine for 2026 and 2027.
Once the EU Council has taken this decision, the European Commission should officially propose the launch of enhanced cooperation, perhaps at the beginning of next week. From a legislative point of view, macro-financial aid to Ukraine should be drawn up on the basis of the legislative proposal, already submitted, to set up a Reparations Loan (see EUROPE 13765/1). On this issue, a qualified majority of Member States is required, as for any macro-financial assistance from the EU to a third country.
With regard to the loan backed by the EU budget, it will be up to the European Union to bear the financial cost, in particular the interest, which could amount to €1 billion in 2027 and €3 billion a year thereafter (around €20 billion in total). The share that the EU24 participating countries will have to pay, due to the non-participation of three Member States, will be calculated on the basis of their contribution to the EU budget (3.74% of the GNI key in total).
As decided by the European Council, Ukraine should only repay the loan after Russia has paid war reparations. In the event of a payment accident, the EU budget will act as a safety net.
It should be noted that the leaders also specified that the EU “reserves the right” to use Russian public assets tied up in the EU to repay the loan, if Ukraine is unable to do so. This provision is of a political nature, and its implementation will inevitably require further guidance from the European Council. (Original version in French by Mathieu Bion)