European Commission welcomes G7 consensus on US$50 billion for Ukraine and highlights EU's contribution

The European Commission has welcomed the consensus reached by the Group of Seven (G7) countries and the European Union on their contributions to a US£50 billion loan to Ukraine. The loan will be covered by the proceeds of frozen Russian assets; the EU's contribution will be approximately EUR18 billion.  Source: European Pravda;  European Commission's press service published a statement on 26 October

Details: The European Commission welcomed the consensus between the G7 countries and the EU on how a joint loan of US£50 billion (EUR45 billion) will be provided for budgetary, military and reconstruction aid to Ukraine.

Quote: "This confirms that the EU and G7 partners fulfil the commitment they made in June at the Apulia G7 Leaders' Summit...This achievement underscores the unwavering commitment of the EU and its G7 partners to support Ukraine in its fight for its freedom, recovery and reconstruction." Quote: "In light of the confirmed contributions of G7 partners, ensuring support proportionate to the size of their respective economies, the EU expects to provide an MFA loan of approximately EUR18 billion as its contribution to the ERA initiative,"  the communique said. Procedures for launching the aid will be completed by the end of the year, and funds may start flowing in 2025. 

Earlier this week, the European Parliament supported the European Commission's proposal to establish a special mechanism, the Ukraine Loan Cooperation Mechanism.

This mechanism would allow the proceeds from frozen Russian assets and voluntary contributions from member states or third countries to be used to cover the loan for Ukraine. The EU Council then approved the decision. The EU's contribution to the total amount of the G7's loan could be up to EUR35 billion, but it will ultimately be less.

This amount was set due to the initial uncertainty about the size of the contributions of other partners, especially the United States.

Background:

• This week, the United States confirmed that it would provide US£20 billion for the loan, the maximum expected amount.

  This amount had been in doubt until recently because the EU failed to implement a safeguard against unexpected sanctions lifting, as Washington wanted, due to Hungary's opposition. 

• The UK's contribution will amount to GBP2.26 billion, or EUR2.94 billion.
• The funds from the new loan will come in addition to the disbursements under the EU's EUR50 billion multi-year financial aid programme for Ukraine (Ukraine Facility) approved last winter, which Ukraine receives in tranches under the obligation to implement the approved reform plan (Ukraine Plan).  

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