According to reports quoting officials, the European Commission will propose a new package of financial aid to Ukraine on Wednesday, including additional loans to provide immediate liquidity to Kyiv and long-term financing obligations for the country’s rehabilitation.
The amount of short-term financial assistance is still being determined, but two people familiar with the talks told Reuters that it is likely to cover Ukraine’s financial needs for two months, primarily through loans.
A third official said the cash will come from the EU budget and EU countries, refuting prior speculation that the funds may be generated in the market by issuing joint bonds backed by the EU budget.
In April, the International Monetary Fund (IMF) anticipated that Ukraine would require $5 billion per month for at least three months to cover the immediate financial gap created by Russia’s invasion.
Kristalina Georgieva, the Fund’s CEO, has requested that this assistance be provided in the form of grants rather than loans.
The extent of EU assistance will also be determined by how much the G7 countries are willing to contribute. The Group of Seven major economies’ finance ministers will meet in the second half of this week, shortly after the Commission is likely to reveal its ideas.
The Commission’s reports did not include any remarks.
EU member states will have to approve the Commission’s plan, which they may try to change.
Governments are split on how to help Ukraine, with many preferring loans despite the IMF’s reservations and Ukraine’s likely inability to repay them. According to EU diplomats, Germany is one of a handful of EU states that support grants.
Officials said the package might include a mix of grants and loans. The funds would go for salaries, pensions, and healthcare expenses.
The additional package would be in addition to the 1.2 billion euros in EU emergency loans to Kyiv approved in January, half of which has already been disbursed and the rest likely to be paid soon, according to a Commission spokesperson.
Officials said the Commission will also announce its commitment to support Ukraine’s long-term rehabilitation on Wednesday, laying out principles for what is expected to be a massive financial undertaking worth trillions of euros.
(Adapted from USNews.com)