NewsEU pledges $55 billion to Ukraine, boosting reform and EU membership bid

EU pledges $55 billion to Ukraine, boosting reform and EU membership bid

War in Ukraine. The EU takes another step towards the payout of substantial support. In the picture, Wołodymyr Zełenski.
War in Ukraine. The EU takes another step towards the payout of substantial support. In the picture, Wołodymyr Zełenski.
Images source: © Getty Images | Anadolu

3:39 PM EDT, May 8, 2024

European Union member states approved Ukraine's plan on Wednesday, committing to implementing 69 reforms. This approval paves the way for Ukraine to receive support totaling 55 billion US dollars by 2027.
On February 1, the leaders of the member states unanimously accepted the Plan for Ukraine. This instrument guarantees the country about 55 billion US dollars for modernization, state continuity, and development over the next few years. With this financial support, Kyiv is set to carry out the necessary reforms, advancing its journey towards European Union membership.

The financial package includes 18.7 billion US dollars in non-repayable support and 36.3 billion US dollars in low-interest loans backed by EU countries.

55 billion US dollars for Ukraine: EU approves reform package

Ukraine's funding is contingent on its government's proposal and subsequent approval by member states of a plan demanding specific reforms and outlining a path for the country's reconstruction and modernization.
On Wednesday, the plan received approval from the member states' ambassadors. Now, their governments must formally endorse it within the European Council.

Funding will be disbursed to Kyiv every quarter, dependent on the Ukrainian government's progress in fulfilling its commitments outlined in the plan.

Ukraine's commitment to reforms

The Ukrainian government has agreed to implement 69 reforms and 10 investment initiatives to achieve milestones similar to those in National Recovery Plans for member states. These changes span 15 sectors: energy, agriculture, transport, ecological transformation, digital infrastructure, state enterprises, and public finance.

The plan also aims to accelerate state decentralization, enhance administrative and judicial efficiency, and foster private sector development, creating a conducive environment for sustainable economic growth. Its successful implementation will expedite Ukraine's EU integration efforts.
On Wednesday, EU foreign affairs chief Josep Borrell highlighted another significant Russian attack on Ukraine's civil infrastructure on the X service, labeling it a war crime. He emphasized Ukraine's urgent need for air defense systems, a topic for the upcoming defense ministers' meeting.

The 55 billion US dollar Plan for Ukraine

The financial support for Ukraine is part of the multiannual financial framework, essentially the EU budget. The European Parliament ratified this allocation in February with a vote of 536 to 40.

This ratification concludes decisions made earlier at the political level. Despite initiating EU accession talks with Ukraine in December 2023, Hungarian Prime Minister Viktor Orbán initially blocked the financial aid and budget review. Consequently, the European Council President called a special Brussels summit on February 1, hoping to resolve the deadlock with Orbán.

Orbán explained his initial resistance, concerned that European funds might be mismanaged or indefinitely tied up in Ukraine. After extensive negotiations, Budapest received a satisfactory proposal, leading Orbán to express optimism about the market and business community's response to the agreement.
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