Brussels: Europe and the Arabs
The European Commission on Thursday disbursed an additional €1 billion tranche of its exceptional macro-financial assistance (MFA) loan to Ukraine, to be repaid from the proceeds of frozen Russian government assets in the EU. This reinforces the EU's role as the largest donor since the start of Russia's war against Ukraine.
The total MFA amount is €18.1 billion, representing the EU's contribution to the G7-led Extraordinary Revenue Acceleration (ERA) initiative, which together aims to provide nearly €45 billion in financial support to Ukraine.
According to a statement issued by the Commission in Brussels, a copy of which we received, this tranche brings the Commission's total MFA loans to Ukraine to €4 billion since the beginning of the year. Discussions are currently underway with Ukraine regarding the timetable for subsequent disbursements. The Commission stands ready to disburse the remaining MFA funds in advance in line with the country's needs, as called for by European leaders at the Special European Council earlier this month. European Commission President Ursula von der Leyen said: "With today's €1 billion disbursement, we reaffirm our unwavering commitment to Ukraine. We are helping the country's economy to continue its trajectory and rebuild its vital infrastructure damaged by Russian aggression. We will continue to support Ukraine for as long as it takes." According to the European statement, "This external assistance is crucial to meeting Ukraine's urgent financial needs, which have increased significantly in light of Russia's intensified and protracted war of aggression.
With this €18.1 billion financial support, Ukraine will be able to support its current and future military, budgetary, and reconstruction needs, and restore its critical infrastructure destroyed by Russia, such as energy infrastructure, water networks, transport networks, roads, and bridges.
This external assistance offers high flexibility and very favorable terms for Ukraine, with very long maturities of up to 45 years. It is worth noting that Ukraine is not expected to repay the loan directly from its own resources. Instead, repayment will be secured through windfall profits from frozen Russian assets collected through the Ukrainian Loan Cooperation Mechanism (ULCM), sending a clear signal that the burden of rebuilding Ukraine will fall on those responsible for its destruction.
The statement concluded by pointing out that since the start of Russia's war of aggression against Ukraine, the European Union, along with its Member States, has unequivocally condemned Russia's actions and provided unprecedented support to Ukraine and its people. As the largest donor, the EU has contributed nearly €140 billion in total, including:
€71.3 billion in financial and budgetary support, and humanitarian aid;
€49.3 billion in military aid to Ukraine under the European Peace Facility and from individual Member States;
€17 billion available to Member States to meet the needs of those displaced by the war;
€1.5 billion resulting from proceeds linked to frozen and frozen Russian sovereign assets (windfall profits).