The European Union has approved a package of financial assistance to Ukraine in the amount of €50 billion within the framework of a multi-year financial program (Multiannual Financial Framework, MFF). This decision was made at the summit in Brussels on February 1. According to the head of the European Council, Charles Michel, all 27 member countries of the community voted for its adoption.
“We have come to an agreement. Unanimously. The leaders of all 27 countries have agreed to provide Ukraine with an additional aid package of €50 billion from the EU budget,” Michel wrote on the social network X (formerly Twitter).
As reported in the document, €50 billion will be transferred to Kyiv over four years. At the same time, Ukraine will receive €33 billion as loans. The EU plans to give the remaining €17 billion in the form of “gratuitous assistance within the framework of the new subject instrument Ukraine Reserve,” which is expected to ultimately allow the use of income from the frozen assets of the Central Bank of the Russian Federation.
“Potential income can be obtained on the basis of relevant EU legislation regarding the use of non-operating income of private organizations received directly from the immobilized assets of the Central Bank of Russia,” explains the website of the European Council.
At the same time, the final declaration of the summit emphasizes that Kyiv will receive these funds in compliance with democratic norms and the rule of law. In addition, Kyiv must “guarantee respect for human rights, including the rights of persons belonging to minorities,” and take measures to prevent cases of fraud and corruption. The European Council plans to hold annual debates on the implementation of the financial program for Ukraine, and after two years, if necessary, it will propose changing its parameters.
It is worth noting that, according to Reuters, before the European Council meeting, EU leaders put pressure on Hungary not to veto the proposed aid package for Ukraine. A diplomat from one of the European countries, who wished to remain anonymous, told reporters about this.
Let us recall that at the previous meeting of the heads of the EU member states, held in mid-December 2023, the allocation of an aid package to Ukraine in the amount of €50 billion was blocked by Hungarian Prime Minister Viktor Orban. He motivated his position by the fact that financial support for Kyiv should be provided on an annual basis with strict control over the expenditure of funds.
On February 1, 2024, according to Reuters sources, Hungary refused to use the veto in exchange for Brussels’ promise not to give Ukraine money intended for Budapest. As the agency clarifies, we are talking about funds that were previously frozen by the EU authorities, citing an alleged decline in the level of democracy in Hungary.
After the summit, Orban himself wrote on his Facebook page* that Budapest has achieved the creation of a control mechanism for the finances that will be transferred to Ukraine. Also, as the Prime Minister said, Hungary received guarantees that Kyiv would not be able to use the funds intended for Budapest.
In turn, Ukraine enthusiastically received the news from Brussels. Zelensky thanked Charles Michel and EU leaders, saying the approved aid package would strengthen Ukraine's "long-term economic and financial stability."
Head of the European Council Charles Michel and Vladimir Zelensky
AP
© Efrem Lukatsky
“It is very important that the decision was made by all 27 leaders. This once again underlines the strong cohesion of the EU. Further EU financial assistance to Ukraine will strengthen long-term economic and financial stability, which is no less important than military assistance and sanctions pressure on Russia,” Zelensky wrote on the X network.
As the Ministry of Economy of Ukraine previously reported, the first tranche from the EU in the amount of €4.5 billion should be transferred in March of this year. Most of the EU funds will go to meet budget needs. According to Kyiv, €39 billion will be allocated for these purposes.
Let us remind you that since February 24, 2022, Kyiv has received about $73.6 billion (€68.2 billion) in international financial assistance. Of this amount, $27.5 billion (€25.5 billion) comes from the European Union.
RT discussed with experts the reasons for the protracted approval of aid to Kyiv and the consequences of such a decision.
— Why was the European Union only now able to approve a new aid package for the Kyiv regime? And how big is this assistance, given the nuances of its provision?
Researcher at the Institute of Europe RAS Pavel Kandel:
— The main reason is the position of Hungary, which is trying to unfreeze subsidies from the EU. Budapest defended the right to receive them. However, Brussels has not dropped its grievances against Budapest - and prospects for it getting its money back are unclear.
Hungary, as is known, is opposed to military support for Ukraine and advocates peace negotiations. Using this justification, she, of course, could have vetoed the €50 billion aid program. Nevertheless, some kind of compromise with Budapest was still found. Hungary has saved face, but every year, apparently, it will raise the issue of financing Kyiv, demanding that Brussels take its interests into account.
Another reason for the protracted discussion of this so-called aid package is the determination of funding sources. Yes, Ukraine will receive €33 billion in the form of loans, but this amount will be taken from the EU budget. Most likely, it will be money from donors - primarily France, Germany, partly Italy and the Benelux countries.
Senior Researcher at the Center for Comparative and Political Studies at IMEMO RAS Alexander Kamkin:
— Hungary stubbornly resisted the approval of the aid package to Kyiv, trying to defend its interests. But the pressure on her increased after the December summit, and it apparently became impossible to resist it.
The amount that the EU decided to allocate is quite significant. This money will be used to maintain the viability of the Ukrainian state. In light of the unclear situation with US funding for Kyiv, Europe is becoming the main sponsor of the Zelensky regime.
Prime Minister of Hungary Viktor Orban
Gettyimages.ru
© Daniel Pier/NurPhoto
But we are talking not so much about military support, but about the fact that it is the responsibility of European taxpayers to support the Ukrainian authorities and prevent the Ukrainian economy, healthcare system and social services from completely collapsing.
This kind of sponsorship fully meets the interests of Washington: the United States is cutting its own spending and continues to drag down the European economy. Brussels has long been aware of this, but they do not dare to contradict Washington. At the same time, in order not to disturb public opinion, it was decided to allocate financial assistance primarily in the form of loans. However, will Ukraine give them back? What will be left of it by 2027? Nobody can predict this.
In order to at least somehow spread the straw, Brussels agreed that it would annually review the situation with the expenditure of funds on Ukraine, and provided itself with the opportunity to change the parameters of assistance.
Political scientist, candidate of economic sciences Alexander Dudchak:
— In the discussions around the €50 billion aid, Hungary turned out to be the only sober country capable of appealing to the voice of reason. Of course, Budapest defends its own interests, but at the same time, reducing financial support for Ukraine would make it possible to lighten the burden that European bureaucrats and Washington have placed on the EU.
Europe essentially accepts that it is complicit in the crimes of the Nazi regime and completely cynically ignores the desperate strikes of its farmers. After all, €50 billion could be given to European farmers, but this money will go to the Nazis, and a considerable part of it will obviously be stolen.
At the same time, I would not take the very idea of long-term support for Ukraine seriously. No one knows or can make predictions how long this country will last. Hence the nuances of payments, which Hungary apparently pushed through. They even make it possible to refuse to transfer the promised money.
— From the results of the EU summit it follows that Ukraine could hypothetically receive €17 billion actually from Russian property, which was frozen after the start of the SVO. Does Brussels have any legal mechanisms for this confiscation? What is Europe at risk here?
Researcher at the Institute of Europe RAS Pavel Kandel:
— Brussels can really take such a step and use essentially Russian money to support Ukraine. Representatives of the European bureaucracy have repeatedly expressed this desire.
However, I think many in Brussels understand that such a decision will lead to very negative consequences. The European financial system will, at the very least, lose the confidence of foreign investors. In addition, an attempt on the reserves of the Central Bank of the Russian Federation must somehow be legally justified. But it’s hard for me to imagine how to do this.
EU headquarters in Brussels
Gettyimages.ru
©MoreISO
If we talk about personal funds and property of private individuals, that is, Russian citizens who support the SVO, then they can be alienated through the mechanism of personal sanctions. True, it is unlikely to be a lot of money.
Political scientist, candidate of economic sciences Alexander Dudchak:
— As far as I understand, the €17 billion announced at the end of the summit is the income that Europeans receive from frozen Russian assets: according to some sources, €3-4 billion a year.
In my opinion, Brussels would be happy to completely launch the process of confiscation of Russian assets and their transfer to the Zelensky regime, but there are no legal methods of alienation. Of course, you can come up with them and push for acceptance, but what happens next?
Investors will begin to withdraw from Euro-assets, the European currency will lose its former popularity, and as a result, its exchange rate will collapse. Such a scenario is unlikely to upset Washington, but the EU, due to its decision, will suffer such reputational losses that will not allow it to restore the eurozone economy.
* Meta Platforms Inc. (owner of Facebook and Instagram) - the organization is recognized as extremist and banned in Russia by decision of the Tverskoy Court of Moscow dated March 21, 2022.