The EU will give Ukraine 1.5 billion euros in a few days: what kind of money is it and how it will be spent

Kseniya KapustynskaNews
EU prepares another tranche of aid to Ukraine
EU prepares another tranche of aid to Ukraine

The European Commission (EC) has already approved the transfer of €1.5 billion to Ukraine in December 2023. This is the last tranche of the annual 18-billion-euro package. Ukraine uses this money to close the budget gap, maintain social infrastructure, and implement reforms, but not for military needs.

The funds usually arrive in Ukraine's accounts on the 20th of each month. And December will not be an exception, said EC President Ursula von der Leyen at a press conference after the EU summit.

"In the coming days, we will transfer 1.5 billion euros (to Ukraine - Ed.)," the head of the European Commission said. She noted that these funds should support Ukraine's financial stability.

In particular, the last tranche of the annual package of 2023 will help Ukraine in early 2024, von der Leyen said. This is especially important given that the EU Council has not yet been able to decide on a record-breaking aid package for Ukraine worth €50 billion by 2027.

The longer the period for which EU financial assistance is approved, the more efficient and stable the funds are allocated. For example, in 2022, Ukraine faced regular delays in receiving money from the EU because new programs had to be approved almost every month.

In 2023, the situation improved thanks to the 18-billion-dollar package. The EU Council needed only one agreement in principle from all members, and the decision on monthly tranches was made by the European Commission, taking into account Ukraine's compliance with the program.

Thus, Ukraine cannot spend the money from the EU solely at its discretion, in particular, it cannot be allocated to finance the Armed Forces. The funds must be spent

  • for urgent budgetary expenditures (non-military), including the payment of pensions and salaries to civil servants
  • restoration of critical infrastructure;
  • support for post-war reconstruction.

The entire €18 billion is a series of long-term loans with a high discount. The repayment period is up to 35 years, starting in 2033. It is expected that the interest on the loans will be partially covered by the EU countries instead of Ukraine.

As reported by OBOZ.UA, Hungary's failure to provide Ukraine with €50 billion in EU aid does not mean that the country will not receive the money. The EU Council did reach an agreement in principle on this issue, although the decision itself was postponed. At the same time, Hungarian Prime Minister Viktor Orban, who is called "Putin's friend," has already said that he will agree to lift his veto only after he receives tens of billions of euros from the EU.

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