EU forges plan B for Ukraine aid
Ukraine needs money to pay wages and pensions and to run hospitals, schools and emergency shelters. 26 EU states would like to transfer billions of euros to the country, but Hungary is standing in the way. A familiar model would circumvent the Hungarian veto.
The European Union is preparing a new aid program for Ukraine worth up to 20 billion euros, in which Hungary would have no say. If Hungarian Prime Minister Viktor Orban maintains his veto at the upcoming EU summit on February 1, the debt-financed plan would bypass Hungary in order to release the money quickly, reports the Financial Times. The model envisages the remaining 26 EU states providing guarantees for the EU budget, which would allow the European Commission to borrow up to 20 billion euros on the capital markets for Ukraine in the coming year.
According to insiders, the exact terms of the agreement and the amount of the aid money are still being negotiated. It is said that the final amount of the aid loans will depend on Ukraine's needs. However, the procedure is already known: In 2020, the EU Commission raised almost 100 billion euros on the capital markets in the same way to support the EU states during the corona crisis.
Bundestag must give its consent
The EU has been trying unsuccessfully for weeks to put together a financial package of €50 billion for Ukraine over the next four years. 17 billion of this is to flow as grants and 33 billion as loans. However, all 27 EU states must agree to this plan, which Orban is blocking: "Veto against the additional funds for Ukraine," declared the Hungarian head of government two weeks ago after the last EU summit in Brussels.
By applying the new model, Orban would no longer be able to block aid to Ukraine. However, the support would have to be approved by the parliaments of several countries, including Germany. According to the Financial Times, insiders hope that this step can be completed so that the aid can be transferred in March at the latest.
Money for pensions, wages and infrastructure
The EU wants to use the financial aid to enable the Ukrainian state to pay wages and pensions. In addition, the operation of hospitals, schools and emergency shelters for resettled people is to be guaranteed. The money can also be used to repair and rebuild infrastructure destroyed by the Russian war of aggression. This includes power lines, water systems, roads and bridges.
In 2023, the EU transferred a total of 18 billion euros to Kiev for this reason. Despite the ongoing war, the disbursement is linked to 20 reform commitments and reporting obligations. These relate to the rule of law and the fight against corruption, for example. Ukraine has up to 35 years to repay the money, which is scheduled to begin in 2033. The interest costs will be borne by the EU member states.
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The European Union is considering a new plan to bypass Hungary's veto and provide Ukraine with much-needed aid, as Hungarian Prime Minister Viktor Orban continues to block EU funding. If this new model is implemented, the remaining 26 EU states would provide guarantees for the EU budget, allowing the European Commission to borrow up to 20 billion euros on the capital markets for Ukraine. This aid would help Ukraine pay wages and pensions, run hospitals, schools, and emergency shelters, and rebuild infrastructure damaged by the Russian attack on Ukraine.
Source: www.ntv.de
