Kiev will have 35 years to pay the bloc back
A sculpture depicting the Euro currency symbol seen in front of the former European Central Bank (ECB) headquarters building in Frankfurt, Germany, December 22, 2021 © AFP / Andre Pain
The European Commission plans to offer Ukraine an $18 billion package of loans to get the country through 2023, on the condition that Kiev repays the debt over 35 years, Commission Vice-President Valdis Dombrovskis told reporters on Wednesday.
The package will be doled out in monthly increments of $1.5 billion through 2023, with each installment paid back in 35 years, Dombrovskis said during a press briefing, according to the Euractiv news site. The EU would borrow the money from global markets and pay the interest on the loans, he added.
Dombrovskis said that Ukraine was in “acute” need of assistance due to Russia’s missile and drone attacks on its power infrastructure, and called on EU countries and the EU parliament to approve the package before the end of the year.
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Securing this approval might prove difficult, however. Hungary will not sign off on the plan, Finance Minister Mihaly Varga told journalists on Tuesday, a day after Foreign Minister Peter Szijjarto declared that Hungary would “certainly not support any kind of joint EU borrowing in this field.”
“We have already done it once,” Szijjarto explained. “We supported joint borrowing during the coronavirus epidemic, and that was more than enough.”
The loan package needs the approval of all 27 EU member states to pass.
The EU has already given Ukraine $4.2 billion in loans this year, out of a package of up to $9 billion. The bloc has also sent more than $2 billion worth of military aid to Kiev.
Ukrainian President Vladimir Zelensky has pushed Western leaders to provide more and more cash to sustain his economy and military. In a video address to the World Bank and the International Monetary Fund in October, he said that his country would need $55 billion next year to cover the estimated budget deficit and rebuild critical infrastructure amid the conflict with Russia.