Plans to disburse €1.8 billion in medium-term loans to help Ukraine out of its economic recession were backed by the European Parliament’s International Trade Committee today (19/03). The loans will top up financial help from other donors under an economic programme put together by the International Monetary Fund (IMF).

1.8 billion Euros is the largest single grant of EU macro-financial aid to a partner country to date.

Ukraine’s acute economic difficulties, due in part to long-standing structural shortcomings, have been aggravated by armed conflict in the east of the country, Russia’s undeclared war and trade restrictions on it, and the escalation of a natural gas supply dispute between the two countries.

The committee approved the EU Commission’s proposal, without amending it, by 30 votes to 7, with no abstention.

“This additional money can make an important contribution to a new package of international support to Ukraine, both directly, through the approved amount of €1.8 billion and indirectly, by mobilising other partners’ contributions”, said MEP rapporteur Gabrielius Landsbergis (European Peoples Party).

Mr Landsbergis explained that the economic recession and capital flight from Ukraine have turned out to be more severe than initially expected, resulting in a sharp depreciation of the currency and a depletion of its international reserves. Ukraine has also lost its access to international debt markets, he added.

The loans will be disbursed in exchange for economic reform commitments and have a maximum maturity of 15 years.