The European Parliament is poised to approve a €35 billion ($38 billion) loan to Ukraine, which is part of a larger $50 billion financial initiative agreed upon by the Group of Seven (G7) nations. This decision comes as Kyiv urgently seeks funding to stabilize its economy, support its military, and maintain its electricity grid amidst ongoing bombardments by Russian forces.
The loan agreement was reached by EU envoys at a meeting in Brussels, with the European Parliament expected to ratify it later in October, allowing for disbursement in 2024. This funding is supported by profits generated from frozen Russian Central Bank assets, which were immobilized following Russia’s invasion of Ukraine in February 2022.
The EU has frozen approximately $235 billion of Russian assets, with about 90 percent held by Euroclear, an international deposit organization based in Belgium. The G7 plan aims to utilize the interest from these immobilized assets to provide further financial assistance to Ukraine, replacing a previous EU scheme that delivered $1.7 billion in July.
However, the implementation of the G7 loan has faced delays, primarily due to the US seeking assurances that Russian assets would remain frozen. Currently, EU member states must agree every six months to extend the asset freeze, a proposal Hungary has resisted, preferring to wait until after the upcoming US presidential election.