Russia Ukraine conflict

EU considers $17.5 billion in more Ukraine aid

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The European Union is in discussions to extend Ukraine around €18 billion ($17.5 billion) in funding next year to help cover urgent financing needs, even as billions of euros in aid the bloc approved more than four months ago remain unpaid.

The European Commission, the EU’s executive arm, is working on the new funding proposal, according to people familiar with the plans. The package will aim to provide at least half of the €3 billion ($2.9 billion) to €3.5 billion ($3.4 billion) Ukraine needs per month, one of the people said.

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Western allies including the US have been discussing ways to keep Ukraine’s economy afloat as the war ticks past the seven-month mark, and officials in Kyiv have redoubled requests for more help. Some partners have privately criticized the EU for not fully delivering on prior commitments of nearly €9 billion ($8.7 billion).

The commission is still working on the details of the new plan and some elements, including the size of the package, haven’t been finalized, said the people, who spoke on condition anonymity because the discussions are private. The commission is also deliberating how to structure the support, including what share of the funding will be loans versus non-refundable grants.

Berlin talks

The proposal could come as early as October 18, but that time frame could slip as discussions are ongoing with the US and other allies at International Monetary Fund meetings in Washington this week, the people said. The EU and the presidency of the Group of Seven most industrialized countries will host a conference on October 25 in Berlin, where they’ll discuss support for Ukraine.

Financial assistance provided to Ukraine has been done so far on an ad hoc basis via concessional loans mostly guaranteed by member states. Any support package would need the backing of member states.

“In view of the continued need of short-term relief, a more structured solution could be contemplated to allow for a higher degree of predictability,” the EU’s budget chief, Johannes Hahn, said during a conference in Brussels on Monday. “I am working hard together with our member states to find a solution which allows us to provide in a structured, predictable and automatic way the necessary financial support at least for next year.”

Ukraine needs around $38 billion in foreign financial aid next year, and the US is willing to support Ukraine with $1.5 billion a month throughout the war, people familiar said.

Any future US commitment depends on congressional approval.

Diplomats preparing for a meeting of EU leaders in Prague last week were told that expected funding levels from European nations would be on a similar scale to the monthly $1.5 billion the US was willing to provide, one of the people said.

Schools, hospitals

More funding from the EU is viewed as critical to cover essentials such as basic public expenditure, schools, hospitals and rebuild critical infrastructure.

Frustration over the delay to provide the financial assistance promised to Ukraine has grown not only in the US but also in the EU. The bloc is still struggling to release parts of a €9 billion ($8.7 billion) package promised last spring as some member states and the commission disagree over issues including whether the aid should be in the form of grants or loans, and how to structure guarantees.

The EU has provided around €19 billion ($18.4 billion) to Ukraine since Russia invaded the country, excluding the military support, mostly via concessional loans, according to Commission President Ursula von der Leyen.

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