Page 78 - UKRRptJul24

Presidency of the Council of the EU, which will soon end its term, has proposed several options to circumvent or complicate Budapest's use of the right of veto. It is the latest attempt to install safeguards against Orbán's years-long campaign to ease EU sanctions against Russia and against the bloc's financial and military support for Ukraine. Hungary will take over the rotating EU Council presidency on July 1.
Ukraine signed a €27B loan agreement with the EU under the Ukraine Facility program. Ukraine and the European Commission have signed a credit agreement within the Ukraine Facility program, which will provide €27B in loans from 2024-2027 to finance the state budget deficit. The National Bank clarified that immediately after this agreement is finalized Ukraine will receive €1.9B in pre-financing from the EU. As a reminder, the Ukraine Facility tool includes three key components:
● direct support for the state budget (€38.27B, of which €33B is in the form of loans and €5.27B in the form of grants)
● a special investment instrument to cover risks in priority sectors (€6.97B)
● technical support in implementing reforms and loan interest coverage, including previously received loans (€4.76B)
Tranches will be received once a quarter based on Ukraine's implementation of the indicators from the Ukraine Plan and the EU's positive assessment. Approximately €16B in budget support through the program is expected this year.
Ukraine to receive profits from Russia's frozen assets in 2 tranches starting next week, Borrell says. "We have a process in order to make this work quickly. The first tranche of money will come next week, in July. The second will come some months later," Josep Borrell said during the press briefing in Luxembourg.
The EU provides more than half of Ukraine's direct budget support. Since the beginning of the full-scale invasion, the EU has been the largest donor of direct budget aid; in just five months of 2024, financial support from the EU exceeds 50% of all funds raised, the Ministry of Finance stated. It is expected that financial aid from the EU this year will be the largest in terms of volume and will reach €16B, provided that Ukraine fulfills the indicators of the Plan of Ukraine.
The EU has devised a legal workaround to sidestep Hungary’s veto on buying weapons for Ukraine with the profits generated by Russia’s frozen assets this year, in a move that could also clear the way for the G7 to pay $50bn to Kyiv, FT reports on June 24. EU chief diplomat Josep Borrell told the Financial Times that since Hungary abstained from an earlier agreement to set aside the proceeds from Russia’s frozen assets, it “should not be part of the decision to use this money”. He added that the workaround was “sophisticated as every legal decision, but it flies”. The legal workaround, which will be discussed by EU foreign ministers on Monday, will also be crucial for the G7 deal to work and for the $50bn loan to be issued by the end of the year. Under the G7 plan, the profits generated by Russia’s frozen assets from next year will be spent on paying off the loan. However, Hungary could still block EU sanctions under which Russian assets are blocked, a decision that needs to be renewed unanimously every six months by the EU’s 27 countries, officials said.
Von der Leyen: Ukraine to receive 3.4 billion euros from EU this summer. Ukraine will receive 1.5 billion euros ($1.6 billion) in Russian frozen assets revenue in July and 1.9 billion euros ($2 billion) under the Ukraine Facility already this month, European Commission President Ursula von der Leyen said on June 11.
Ukraine and more than 30 international partners have created the Small and Medium Business Sustainability Alliance and will contribute more than €7B. In particular, Austria, Canada, Estonia, Germany, Japan,
78 UKRAINE Country Report July 2024 www.intellinews.com