The first bill – “Strengthened cooperation on a loan to Ukraine” – is a formal agreement by the European Parliament to accelerate work on the European Council’s decision to grant a loan to Ukraine. This bill is a framework and serves as a political signal to all parties involved in the loan disbursement to start the necessary work. It has already been approved by the EU Council and the substantive vote will take place on Wednesday, January 21.
The other two draft laws concern the amount of the loan, the terms of repayment, its financial mechanisms and instruments, as well as Ukraine’s obligations. As these two documents require consideration in specialized committees, possible amendments and agreement with the EU Council, the final vote on them will take place at the next session of the European Parliament, which will be held in February.
Since the European Parliament has officially started the process of allocating the loan to Ukraine, now all the details should be agreed upon by the members of the relevant committees and the EU Council in accordance with the usual legislative procedure.
According to IMF and European Commission estimates, Ukraine needs 137 billion euros in 2026-2027 to support state institutions and military assistance. Of this amount, 90bn was allocated by the EU, while the rest should come from the G7 countries.
The financial resources of Ukraine’s budget may be exhausted as early as April. The launch of an urgent procedure for the consideration of draft laws on allocating a loan to Ukraine in the European Parliament and the EU Council is important precisely because it will make it possible to start timely payments to Kiev at the beginning of the second quarter of this year.
It should be noted that the legislative proposals suggest dividing the sum of 90bn euros into two parts: one third, i.e. 30bn euros, will be used for budgetary support for Kiev, while two thirds, 60bn euros, will be used for military aid. The terms of the loan stipulate that Ukraine will have to repay the funds only if Russia pays it reparations for damages.
