The European Commission proposed a new macro-financial assistance package for Ukraine worth 18 billion euros in favorable loans for the upcoming year 2023.
The Commission is expected to secure these funds by borrowing on financial markets. The aid will be in the form of very favorable loans, with the Commission subsidizing interest rates, a maturity period of up to 35 years, and the principal to be repaid only after 2033.
The Commission would disburse 1.5 billion euros to Ukraine each month next year. In return, Ukraine must commit to respecting the rule of law and democratic institutions.
These amounts are expected to cover a significant portion of Ukraine’s short-term financing needs, which local authorities and the International Monetary Fund estimate at 3 to 4 billion euros per month.
The Commission has so far disbursed 4.2 billion euros in macro-financial assistance to Ukraine, and by the end of this month, it will disburse an additional 2.5 billion euros.
Thanks to the proposed aid of 18 billion euros, which still needs to be supported by the Council and the European Parliament, Ukraine will be able to pay salaries and pensions, ensure the functioning of essential public services, schools, hospitals, and accommodation for displaced persons. It will also help maintain macroeconomic stability and restore critical infrastructure that has been devastated by Russian aggression, such as energy infrastructure, water supply, and transport networks, the Commission states.
