EU develops four-year financial aid plan for Ukraine – report
In response to the criticism of its
“unsystematic support” of Ukraine, the European
Union is working on a four-year financial aid plan for the country,
potentially worth tens of billions of euros, the Financial Times reported on
June 1.
EU diplomats and officials suggest the European Commission is preparing a support proposal to meet Ukraine's requirements through 2027, not just for the upcoming year.
Supporters of the plan believe it would give Kyiv more financial certainty and encourage other allies, including the United States and the UK, to offer similar long-term commitments.
The Financial Times noted concerns about political instability in Washington ahead of the 2024 presidential elections and how it could undermine U.S. commitment to aiding Ukraine.
The funding could extend the current €18 billion EU macro-financial aid package for this year or assist Ukraine with its urgent reconstruction needs, estimated at $14 billion this year.
The plan requires further refinement, with the European Commission yet to approve the final figures. The funding will be contingent on continuous governance reforms in Ukraine, coupled with regular audits.
Achieving unanimous agreement on funding among EU member countries could prove challenging, as Hungary has previously blocked funding packages for Ukraine. Hungarian PM Viktor Orban uses Ukraine aid as leverage to unfreeze billions of euros of EU funding for his own country.
On March 21, the International Monetary Fund announced a staff-level agreement on a new four-year Extended Fund Facility program for Ukraine, totaling $15.6 billion. To date, Ukraine has already secured $2.7 billion as the first tranche, with the second one of $900 million expected to be approved by the IMF Board in near future.
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