EU blocks €1.5 billion loan to Ukraine
2 Min Read
As for the reason, the European Commission cites concerns over the country’s ability to repay.
-
€1.5 billion loan to Ukraine blocked by EU
The European Commission’s budget unit decided to block a loan that was issued by the European Investment Bank (EIB) which amounts to €1.5 billion ($1.52 billion). This decision came as a result of concerns over Ukraine’s “financial reliability", sources told Bloomberg.
70% of the total funding is demanded by the Commission instead of the usual 9% for operations outside the EU, in case Ukraine defaults on its debt.
Read next: US officials warn of fraud, waste in Ukraine funds
The Ukrainian government said earlier this month that it expected the country’s post-war reconstruction to cost $750 billion. However, according to the EIB’s estimates, Kiev may need as much as $1 trillion in outside assistance.
At the end of their debates in Germany last May, the G7 finance ministers promised to mobilize $20 billion in budgetary aid for Ukraine. However, Germany’s Finance Minister later ruled out any joint EU borrowing to help cover the cost.
According to Bloomberg, the EU has been struggling to agree on even short-term financing to enable Kiev to pay its current expenses. Last week’s proposal of €1 billion ($1 billion) stalled as Germany blocked a larger package of nearly €9 billion ($9.1 billion), the publication said.
Read more: World Bank sends $1.49 billion aid package for Ukraine
