| Author (Corporate) | European Commission: DG Economic and Financial Affairs |
|---|---|
| Series Details | COM (2024) 426 |
| Publication Date | 20/09/2024 |
| Content Type | News, Policy-making |
Summary:Legislative initiative adopted by the European Commission on 20 September 2024, establishing a Ukraine Loan Cooperation Mechanism and an exceptional Macro-Financial Assistance (MFA) loan of up to €35 billion. Further information:In February 2022, Russia launched a military invasion of Ukraine, with devastating consequences for Ukraine and its people. The European Union (EU) and its Member States have condemned Russia's actions and has offered support to Ukraine. However, Russia's intensified activity has increased Ukraine's financing needs. It became clear that additional sources of funding would be required, and that Ukraine's financing needs for 2025 outstrip the latest projections by the International Monetary Fund (IMF). As part of the sanctions imposed by the EU on Russia, assets of the Central Bank of Russia held by financial institutions in the Member States have been immobilised since February 2022. The prohibition of transactions on these assets generates an extraordinary and unexpected cash accumulation on the balance sheets of central securities depositories. Council Decision (CFSP) 2024/577 provides for measures applying from February 2024, laying down rules for the setting aside of the extraordinary revenues stemming from the immobilisation. Council Decision (CFSP) 2024/1470 was adopted in May 2024 to introduce measures on the use of the ensuing net profits for the benefit of Ukraine. This proposal seeks to establish a Ukraine Loan Cooperation Mechanism to provide the country with non-repayable financial support to assist in repaying loans provided by G7 partners through their Extraordinary Revenue Acceleration (ERA) Loans for Ukraine. The repayment of the loans would be supported by proceeds from future flows of the extraordinary profits stemming from Russia’s immobilised assets in the EU. Alongside it, the initiative proposes the allocation of an exception MFA loan of up to €35 billion as the EU's contribution to the loans under the ERA scheme. This package aims to fulfil the commitments made during the G7 Leaders summit and the European Council meeting, both held in June 2024. The draft law was adopted by the European Commission on 20 September 2024. The Council of the European Union endorsed it on 9 October. |
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| Source Link | Link to Main Source https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=COM:2024:426:FIN |
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| Subject Categories | Economic and Financial Affairs |
| Subject Tags | Economic Governance | Situation, Wars | Conflicts |
| Keywords | Macro-Financial Assistance [MFA], War in Ukraine (2022-) |
| Countries / Regions | Ukraine |
| International Organisations | European Union [EU] |
