European Commission welcomes G7 consensus on $50 billion for Ukraine

The European Commission has welcomed the consensus reached by the Group of Seven countries and the European Union on their contributions to a $50 billion loan to Ukraine, which will be repaid from the proceeds of frozen Russian assets. It also mentioned that the EU’s contribution will be approximately €18 billion. 

The G7 countries and the EU reached a consensus to provide Ukraine with a joint loan of $50 billion (45 billion euros) for budgetary, military, and reconstruction assistance, according to the press-release.

“This confirms that the EU and G7 partners fulfil the commitment they made in June at the Apulia G7 Leaders’ Summit. These loans will be serviced and repaid by future flows of extraordinary revenues stemming from the immobilisation of Russian Central Bank assets. This achievement underscores the unwavering commitment of the EU and its G7 partners to support Ukraine in its fight for its freedom, recovery and reconstruction,” the statement said.

The communiqué states that the EU expects to provide a macro-financial loan of approximately €18 billion, taking into account the confirmed contributions of G7 partners, proportionate to the size of their economies. They plan to complete the procedures for launching the assistance by the end of the year, and funds may begin to flow in 2025.

The European Parliament backed the European Commission’s proposal earlier this week to establish the Ukraine Loan Cooperation Mechanism, a special mechanism that would enable the repayment of the loan to Ukraine with proceeds from frozen Russian assets and voluntary contributions from member states or third countries. The EU Council then approved the decision.

The EU’s contribution to the Group of Seven loan could reach €35 billion, but it will be less. The EU member nations set this amount due to the initial uncertainty about the size of contributions from other partners, particularly the United States.

This week, the United States confirmed that it would provide $20 billion for the loan, the maximum expected amount, which until recently had been in doubt because the EU failed to implement a safeguard against unexpected sanctions lifting, as Washington wanted, due to Hungary’s opposition. 

The amount of the UK’s contribution will be 2.26 billion pounds, or $2.94 billion.

The funds from the new loan will be in addition to the disbursements under the EU’s €50 billion multi-year financial assistance program for Ukraine (Ukraine Facility) approved last winter, which Ukraine receives in tranches under the obligation to implement the approved reform plan (Ukraine Plan).