EU Parliament approves EUR 1.2 b in loans to Ukraine, but with conditions

17 February 2022, 02:39 PM

The European Parliament on Feb. 16 approved a EUR 1.2 billion ($1.36 billion) macro-financial loan to Ukraine to help cover its external financing needs in 2022, the parliament’s press service said.

The resolution, adopted under an urgency procedure, passed with 598 votes for, 55 against and 41 abstentions.

The loan will be paid out in two installments, the EU Parliament noted.

Half of the EUR 1.2 billion loan can be disbursed immediately to foster stability in Ukraine, if certain preconditions are met – specifically, the country must show progress in implementing a macroeconomic program set up by the International Monetary Fund (IMF).

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Ukrainian Prime Minister Denys Shmyhal welcomed the decision of the European Parliament.

“The EU demonstrates once again its unity, unwavering support to the sovereignty, territorial integrity and economic and financial stability of Ukraine. A friend in need is a friend indeed,” Shmyhal tweeted on Feb. 16.

On Feb. 11, the EU Council approved the decision of the European Commission to provide a EUR 1.2 billion macro-financial assistance to Ukraine.

The assistance is designed for 12 months and will be paid out in two tranches. The term for the provision of the second tranche will depend on Ukraine’s fulfillment of a previously agreed upon IMF program.

From 2014 to 2021, the European Union has provided Ukraine with five macro-financial credit programs, adding up to loans in total of EUR 5 billion.

In late January, European Commission President Ursula von der Leyen tabled a motion to provide Ukraine with additional EUR 1.2 billion macro-financial loan to boost its economic stability amid the ongoing threat of Russian invasion.

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