Ukraine signs agreement with EU to attract €35 billion using Russian assets
Ukraine has signed a Memorandum of Understanding and a Loan Agreement with the European Union to attract up to €35 billion in macro-financial assistance (MFA). The funds are part of the G7's Extraordinary Revenue Acceleration Loans for Ukraine initiative, the press service of the Ministry of Finance of Ukraine reports.
Finance Minister Sergii Marchenko and National Bank of Ukraine Governor Andriy Pyshnyy signed the agreement on behalf of Ukraine. European Commission Executive Vice President Valdis Dombrovskis represented the EU.
"The final amount of the MFA will be determined after all parties to the initiative approve the amount of loans. Taking into account the proposed financing of $20 billion by the United States, the EU's Macro-Financial Assistance could be in the amount of €18 billion," the statement said.
As noted in the Ministry of Finance, the loan repayment will be carried out exclusively at the expense of future profits from frozen Russian sovereign assets in the EU. Thus, it is expected that all MFA funds for Ukraine will be on a non-repayable basis. Domestic financial resources will not be directed to repayment.
The funds will be provided in accordance with the new Ukraine Loan Cooperation Mechanism (ULCM), which will provide a non-repayable form of macro-financial assistance.
The program provides for 14 measures to attract macro-financial assistance. These include macro-financial stability, state-owned enterprises, public administration, energy, the rule of law and anti-corruption, as well as the defense industry.
"The next important step is to raise funds from the frozen assets of the aggressor country. In recent months, we have been actively working with the European Union and other parties within the initiative to achieve concrete results in meeting Ukraine's financial needs in 2025 and beyond," said Minister of Finance of Ukraine Sergii Marchenko.
$50 billion loan
In June, G7 leaders agreed to provide Ukraine with a $50 billion loan package, partially funded by interest from confiscated Russian assets following the full-scale invasion in February 2022.
António Costa, President of the European Council, stated that starting in January 2025, Ukraine will receive €1.5 billion monthly from the EU. These funds, sourced from frozen Russian assets, may also be used for military purposes.
On December 3, Ukraine's Verkhovna Rada amended the Budget Code to enable the receipt of $50 billion from G7 countries secured against Russian assets. The law introduces a new concept of "contingent debt obligations," ensuring that the funds will not be recorded as Ukraine's public debt. Ukraine will not repay the loan until it receives reparations from Russia.
