Ukraine, the EU tries to bypass Orban with a 20 billion aid reserve plan

The European Union is preparing a backup plan to provide financial assistance to Ukraine worth 20 billion euros. According to the Financial Times, the search for new financing options became necessary after the Hungarian Prime Minister, Viktor Orban, on the occasion of the last EU summit, in mid-December, blocked an amendment to the community budget that provided for the allocation of 50 billion euros in favor of Ukraine in the period 2024-2027. The new scheme under discussion means that the 27 countries will take on financial guarantees for the EU budget and allow the European Commission to borrow €20 billion on capital markets to help Kiev. The final amount of financing will depend on Ukraine’s needs.

The main advantage of this scheme, writes the FT, is that it does not require the consent of all EU members and therefore eliminates the risk of a new veto by Hungary. Some countries, such as Germany and the Netherlands, will still need parliamentary approval to provide such guarantees. A decision on the plan could be taken as early as the February 1 summit, and Brussels expects the funds to reach Kiev by March 2024. If the plan is adopted, the EU could provide guarantees to the International Monetary Fund, which in turn will allocate $900 million in new financing to the government led by Volodymyr Zelensky. The disadvantage of this plan is that the allocation of funds will only be possible in the form of loans and not grants.

Source: IL Tempo

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