FT: EU announces €35 billion in loan for Ukraine as Russian attacks intensify

On September 20, European Commission President Ursula von der Leyen announced a €35 billion loan for Ukraine as part of a G7 initiative aimed at raising $50 billion using future profits from frozen Russian state assets.

She made the announcement during her visit to Kyiv, which marks her eighth visit to Ukraine, Caliber.Az reports, citing The Financial Times.

During her ongoing visit, she plans to discuss critical issues including winter preparedness, defense, EU accession, and progress on the G7 loans.

The loan comes at a crucial time as Ukraine faces intensified Russian attacks on its energy infrastructure, underscoring the urgent need for additional aid.

President Volodymyr Zelenskyy emphasized the importance of these frozen assets, stating, “These assets should be used to protect lives in Ukraine against Russian aggression. There is a clear decision regarding $50bn for Ukraine from Russian assets, and a mechanism for its implementation is needed to ensure that this support for Ukraine is felt in the near future.”

The G7 leaders had agreed in June to provide $50 billion in loans to Ukraine, with allocations based on each country’s economic weight. Initially, the EU and the US were set to contribute $20 billion each, while Canada, Japan, and the UK would cover the remainder. However, the US conditioned its involvement on legal guarantees that the assets would remain frozen for an extended period, a stipulation the EU has struggled to meet due to Hungary's opposition to extending sanctions against Russia.

In light of the US's hesitance and Hungary's veto, the European Commission sought to increase its loan share to €40 billion, secured against the EU’s common budget. However, EU capitals expressed concerns about this figure, leading to negotiations with the UK, Canada, and Japan to raise their contributions instead. The final agreement of €35 billion represents a compromise, allowing for the possibility of US participation at a later date while minimizing EU exposure.

For the loan to take effect, a majority of EU member states and the European Parliament must approve the agreement before the year's end.