EU to allocate a record 50 billion euros to Ukraine for current expenses

The European Commission is preparing to provide financial assistance to Ukraine for a record 50 billion euros, Bloomberg wrote, citing sources familiar with the plan.

According to them, the aid package will help Kyiv to finance the current costs of the government, including salaries in the public sector and pensions. The funds will also be used for “urgent reconstruction”.

The aid is expected to be provided in the form of grants, soft loans and guarantees, the agency’s sources said. They added that the European Commission proposes to collect the necessary amount at the expense of contributions from EU member states so as not to resort to borrowing in the markets.

At the same time, a condition for allocating 50bn euros to Ukraine will be judicial reform and the fight against corruption. The same requirements are the conditions for the start of negotiations on Ukraine’s accession to the EU. The day before, Reuters reported that Kyiv had already fulfilled two of the seven conditions for EU membership, in particular, it reformed the judicial system and changed the media law.

Since the beginning of the war, EU countries have approved almost 38 billion euros in economic aid to Ukraine. According to the Ukrainian National Bank, in 2022 the country received a total of 32.1 billion dollars from the West, including 12 billion from the U.S. and 8 billion from the EU. Another $2.7 billion was provided by the International Monetary Fund, $1.9 billion by Canada, and $1.5 billion by Germany.

In early June, it became known that the EU was developing a four-year plan of financial assistance to Ukraine worth “tens of billions of euros” and was seeking to lay “a more stable and predictable basis for such support”, the Financial Times wrote.

The plan will run until and including 2027. According to proponents of such an approach, it would provide Ukraine with “greater certainty” in its finances. In addition, the initiative would encourage other allies, such as the U.S. and Britain, to provide similar long-term commitments. This is especially relevant given the growing uncertainty about Washington’s aid to Kyiv amid the upcoming U.S. presidential election next year, the FT source said.

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