The EU plans to allocate up to €40 billion in new loans to Ukraine by the end of 2024, regardless of US participation, after a G7 plan to use frozen Russian assets to help Kyiv lost momentum, the Financial Times reported, citing unnamed sources familiar with the matter.
In June, the G7 leaders agreed to issue a $50 billion loan to Ukraine to be repaid with future profits from around €260 billion in frozen Russian foreign reserves. The US at the time sought safeguards that would ensure the Russian assets, most of them held in Europe, remained frozen.
Brussels is now concerned that Hungary, which looked to delay a decision on the frozen assets scheme until after the US presidential election on Nov 5, will prevent the EU from delivering on the safeguards, the sources said.
These worries prompted the EU to start preparing an alternative to the initial plan. According to a draft legal proposal seen by the FT, the EU will raise an unspecified number of billions in loans to Ukraine by the end of the year. The proposal would need majority support rather than unanimity.
The final figure could range between €20 billion and €40 billion and would be determined by the European Commission after consulting member states. The funding is intended to aid the financial stability of Ukraine, which faces a $38 billion financing gap in 2025.
