EU to allocate up to €40 billion to Ukraine without US involvement, FT reports

The European Union is preparing to provide up to €40 billion to Ukraine by the end of 2024 without the involvement of the United States.

Source: Financial Times

Details: After the failure of the G7 plan to use frozen Russian assets, the EU is moving ahead with plans to give Ukraine up to €40 billion by the end of 2024, without the participation of the US.

In Brussels, there are concerns that Hungary might block the guarantees needed by the US to participate in the frozen Russian assets scheme. Viktor Orbán's government has attempted to delay the decision until after the US elections on 5 November.

Work on the alternative aid package is expected to begin in the coming weeks. The funds are crucial as, according to forecasts from the International Monetary Fund and Kyiv, Ukraine may face a funding gap of US$38 billion in 2025.

The EU plans to secure "an unspecified number of billions in loans" for Ukraine by the end of the year. This decision will require a majority vote, eliminating Hungary's veto power.

Officials say the aid package may range from €20 to €40 billion, with the final amount to be determined by the European Commission after consultations with member states. The work is expected to start soon, as the current support package for Ukraine expires at the end of the year.

Revenue from frozen Russian assets, amounting to €2.5-3 billion annually, will still be used to pay off the loan. Currently, this revenue is being channelled to Ukraine through the EU budget.

Background: 

• The European Commission plans to soon propose a US$50 billion loan package to support Ukraine, aiming to complete the legislative work by the end of the year.
• Ukraine had its own set of essential requirements for the US$50 billion, including the requirement that the money be received this year and be unconditional.

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