BRUSSELS: Two-thirds of a vital 90 billion euros ($105 billion) EU loan for Ukraine will go to cover Kyiv’s military apparatus with the rest earmarked for general budget support, Brussels said Wednesday.
Agreed by EU member states in December after months of diplomatic wrangling, the loan offers cash-strapped Ukraine a desperately needed lifeline as Russia’s invasion of its neighbor grinds toward its fifth year.
The European Commission said it was pushing for Kyiv to receive the first disbursement in April, as it provided details of the facility at a press conference in Brussels.
“With this support, we make sure that Ukraine can on one hand bolster its defense on the battlefield and strengthen its defense capabilities — so, its military needs — and on the other hand keep the state and basic services running,” EU chief Ursula von der Leyen told reporters.
Von der Leyen said the funds will be used to buy weapons mainly from Ukraine and European nations — something France and others have long said is key to bolster the EU’s defense industry and ease dependence on the United States.
But if the necessary equipment were not to be readily available in Europe, it would be occasionally possible for Kyiv to shop outside the continent, the commission president added.
“For us it is a lot of money. These are billions and billions that are being invested. And these investments should have a return on investment in creating jobs, in creating research and development,” said von der Leyen.
The loan, which is to cover two-thirds of Ukraine’s financial needs for the next two years, has to be approved by the European Parliament and member states before the money can start to be paid out.
It was agreed last month by European Union leaders who settled on a loan backed by the bloc’s common budget, after plans to tap frozen Russian central bank assets fell by the wayside.
The EU has said Ukraine would only need to pay back the money once Moscow coughs up for the damages it has wrought.
Brussels will cover interest costs, expected to hover around three billion euros per year, through the EU budget.