EU to Release €3.2Billion to Ukraine

The European Union (EU) will disburse 3.2 billion euros ($3.7 billion) in budget support to Ukraine next month, marking the first payment under a larger loan approved in April, officials in Brussels said on Wednesday.

EU economy commissioner Valdis Dombrovskis said the release follows agreement between Brussels and Kyiv on the conditions attached to the Macro-Financial Assistance (MFA) component of the broader 90-billion-euro loan.

He said the first tranche is expected “around mid-June,” noting that disbursement depends on Ukraine’s rapid ratification of the relevant agreement.

The European Union approved the multi-billion-euro financing package in April after prolonged negotiations, including opposition from Hungary, which had previously blocked the deal.

The broader scheme is designed to support Ukraine’s war-related expenditures, including defence needs, while also funding reconstruction and helping maintain government operations as it faces a balance of payments crisis caused by the war.

Dombrovskis said the macro-financial assistance portion is linked to reforms in Ukraine, including improvements in public spending efficiency and alignment of tax and anti-evasion rules with EU standards.

He added that discussions are still ongoing on parts of the remaining financing conditions, but indicated that the initial disbursement is expected to proceed shortly.

The EU estimates the loan will cover about two-thirds of Ukraine’s external financing needs for the current and next fiscal years.

He also stressed the importance of contributions from other G7 and international partners.

Under the arrangement, Ukraine is expected to repay the funds only if Russia provides compensation for war-related damages.