In order to speed up the legislative procedure and in fine the first payments to Ukraine, on Wednesday 11 February, the European Parliament endorsed the position of the Council of the European Union on the EU’s €90 billion loan to Kyiv for 2026 and 2027 (see EUROPE 13801/15).
Technically, MEPs amended the initial proposal by voting, in the form of a single amendment, on the three legislative texts on the table as amended by the Member States: - the regulation implementing enhanced cooperation on the establishment of the loan (473 votes in favour, 140 against, 44 abstentions); - the proposal amending Regulation (2024/792) establishing the Ukraine Facility (458 votes in favour, 140 against, 32 abstentions); - the amendment of the Multiannual Financial Framework (MFF) 2021-2027 (490 votes in favour, 130 against, 32 abstentions).
“In the European Parliament, as soon as the Council reached its agreement”, MEPs activated “the urgent procedure” for immediate coordination between the political groups, as Nathalie Loiseau (Renew Europe, French) indicated on Wednesday 11 February. She reported “broad support” from the EPP, S&D, Renew Europe and Greens/EFA groups for “endorsing the Council’s text as it stands via a single amendment” and asking the European Commission for “a technical accompanying note” to ensure administrative speed and simplicity.
The Council still has to formally adopt the legislative package.
The ‘Ukraine Support Loan’ will be financed through EU borrowing from capital markets backed by the MFF on the basis of enhanced cooperation involving 24 Member States (all except Hungary, Slovakia and the Czech Republic). Of the €90 billion package, two-thirds will help Ukraine continue the war effort against the Russian military invasion and one-third will be used to finance Ukraine’s budgetary needs, notably through the ‘Ukraine Facility’.
When making military purchases, the Ukrainian authorities will have to obtain supplies first from their own industry, then from industries in EU or EEA/EFTA countries, and then from third countries up to a maximum of 35% of all the components of a piece of military equipment. A derogation will be possible to purchase arms or ammunition directly from third countries if the equipment is not available on the scale required in Ukraine or in EU or EEA/EFTA countries, or if it is not available within a timeframe commensurate with the urgency of the war in Ukraine.
To benefit from this derogation, third countries - such as the United Kingdom, Japan or South Korea - that have signed a security and defence partnership with the EU will have to have already participated in the Ukrainian war effort and contributed financially to offset the interest on the EU borrowing.
Before payments can begin, the Commission and Ukraine still have to agree on a Memorandum of Understanding (MoU) in which the EU candidate country will commit to carrying out robust reforms to bring it closer to the acquis communautaire. The aim is to enable the first instalment to be paid in early April.
See the Council’s agreement on the terms of the Ukraine Support Loan: https://aeur.eu/f/kkw; and the modification of the Ukraine Facility: https://aeur.eu/f/kkx (Original version in French by Mathieu Bion with Nithya Paquiry)