EU says Ukraine to spend bulk of $135b loan on military needs
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European Commission president Ursula von der Leyen providing details of the loan facility for Ukraine at a press conference in Brussels on Jan 14.
PHOTO: AFP
- EU provides Ukraine with a €90 billion loan, approved in December after diplomatic efforts, to support Kyiv during Russian invasion.
- Two-thirds of the EU loan is to bolster Ukraine's military, buying weapons mainly from Ukraine and European nations.
- The rest of the Ukraine funding will maintain basic state services, with EU covering interest and repayment linked to Russian reparations.
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BRUSSELS - Two-thirds of a vital €90 billion (S$135 billion) EU loan for Ukraine will go to cover Kyiv’s military apparatus, with the rest earmarked for general budget support, Brussels said on Jan 14.
Agreed by EU member states in December
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 defence on the battlefield and strengthen its defence 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.
Dr 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 defence 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 Dr 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 in December 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 damage it has wrought on its neighbour.
Brussels will cover interest costs, expected to hover around €3 billion a year, through the EU budget. AFP
