Parliament approves €1.2 billion in loans to Ukraine – The European Sting – Critical News & Insights on European Politics, Economy, Foreign Affairs, Business & Technology

(Credit: Unsplash)

This article is brought to you in association with the European Parliament.


On Wednesday, MEPs gave the go-ahead for a €1.2 billion macro-financial loan to help Ukraine cover its external financing needs in 2022.

Parliament approved a Commission proposal to provide Kyiv with macro-financial assistance, an emergency resource for EU neighboring countries struggling to pay their bills. It will be paid in two instalments.

Half of the €1.2 billion loan can be disbursed immediately to support stability in Ukraine, if certain preconditions are met.

The loan serves as “rapid support in an acute crisis situation and to build the country’s resilience,” the proposal says. For the money to be disbursed, the country must show progress in implementing a macroeconomic program put in place by the International Monetary Fund (IMF). MEPs point out that “effective democratic mechanisms, including a multi-party parliamentary system, and the rule of law, and guaranteeing respect for human rights” are also prerequisites for the disbursement.

The resolution, adopted under urgent procedure, was adopted with 598 votes for, 55 against and 41 abstentions.

Ukraine’s external funding has dried up due to the Russian military threat and the deteriorating economic situation following the COVID-19 pandemic.

context

Since 2014, the EU and European financial institutions have allocated more than 17 billion euros in grants and loans to the country, according to the Commission. Of this amount, 5 billion euros were paid out under five MFA programs to support the implementation of a vast reform.

The IMF has identified a $2.5 billion (€2.2 billion) shortfall in Ukraine’s financing needs for 2022.