Council of European Union approves 18-bln-euro assistance to Ukraine in 2023

BRUSSELS. Dec 12 (Interfax) - The Council of the European Union has approved 18-billion-euro assistance to Ukraine in 2023, says a communique published in Brussels on Saturday.

"The Council reached agreement on a legislative package which will enable the EU to help Ukraine financially throughout 2023 with 18 billion euro. The proposal was adopted by the Council today via a written procedure and it will be submitted to the European Parliament for its possible adoption next week," the communique said.

"Ukraine can count on the EU. We will continue to support Ukraine, also financially, for as long as it takes," Zbynek Stanjura, finance minister of Czechia that currently presides in the Council of the European Union, said.

The amount to be lent to Ukraine in 2023 will be 18 billion euros, and the loans will have a 10-year grace period, the communique said. EU members will cover the bulk of interest expenses. Loan guarantees will be provided either from the EU budget or by EU members.

"The aim is to provide short-term financial relief, financing Ukraine's immediate needs, rehabilitation of critical infrastructure and initial support towards sustainable post-war reconstruction, with a view to supporting Ukraine on its path towards European integration," the communique said.

Meanwhile, the Ukrainian media reported, citing a statement of the Finance Ministry that Ukraine should sign a Memorandum of Understanding and a Loan Agreement to receive 18 billion euros of the European Union macro-financial assistance in 2023, which will set the conditions of structural policy. Their fulfillment within a year will be the basis for receiving the funds.

"The preferential loan funds are expected to be channeled to the Ukrainian state budget during 2023 in equal installments, taking into account Ukraine's fulfillment of the conditions agreed by the parties," the Finance Ministry said.

Ukraine is expected to receive the first tranche as early as in January 2023.

Finance Minister Sergei Marchenko thanked the EU Council for the December 10 decision to back the proposal of the European Commission to allocate 18 billion euros to Ukraine in 2023. This proposal should be supported by the European Parliament.

"The decision of the EU Council is an important sign of support and solidarity with Ukraine... The implementation of the new EU macro-financial assistance program will be one of the guarantees of preserving financial and economic stability in the state, as well as our confidence in the stable passage of the next budget year," Marchenko noted.

As reported, the monthly need for state budget deficit financing this year, according to the Finance Ministry and the government, stands at about $5 billion. Next year, the government plans to slash the state budget deficit to between $3 billion and $4 billion per month (a total of $38 billion per year), counting on its financing by the United States, the IMF and the EU, and attract $17 billion for urgent restoration.

According to the Finance Ministry, the amount of financing actually allocated to Ukraine by international partners since the outbreak of the crisis to cover the state budget deficit as of December 7 reached $27.26 billion, and another $1 billion for reconstruction, or a total of 75% of their declared aid totaling $37.79 billion.

The Finance Ministry emphasized that the total amount of the EU macro-financial assistance received by Ukraine since February 24 amounted to 6.7 billion euros. Another $626 million was allocated in grants.