EU ambassadors have given the green light to a partial negotiating mandate for the creation of the Ukraine Facility, a dedicated instrument aimed at bolstering Ukraine’s recovery, reconstruction, and modernization efforts. This support mechanism, designed to align with Ukraine’s path to EU accession, consolidates the EU’s budget support into a single, comprehensive instrument.
The Ukraine Facility comes at a critical juncture, addressing the unparalleled challenges faced by Ukraine due to Russia’s ongoing war of aggression. The Council’s approval underscores the EU’s commitment to providing steadfast support to Ukraine, not only in rebuilding the nation but also in facilitating crucial reforms necessary for its future EU membership.
Vincent van Peteghem, Belgian Minister of Finance, emphasized, “The EU is committed to providing unfaltering support to Ukraine as long as needed. The Ukraine Facility aims to grant consistent support for Ukraine to rebuild its country in the midst of the unprecedented challenges brought by Russia’s war of aggression. At the same time, the support would help Ukraine take forward the reforms and modernization efforts needed for it to advance on its path towards future EU membership.”
The partial negotiating mandate focuses on key elements, preserving the core aspects of the Commission’s proposal. The Ukraine Facility comprises three pillars:
Pillar I: The Ukrainian government will devise a comprehensive ‘Ukraine Plan,’ outlining its intentions for recovery, reconstruction, and modernization, along with reform commitments for EU accession. Financial support, in the form of grants and loans, will be contingent on the plan’s implementation, guided by specific conditions and a disbursement timeline.
Pillar II: The Ukraine Investment Framework will see the EU providing support through budgetary guarantees and a mix of grants and loans from public and private institutions. A Ukraine Guarantee will mitigate risks associated with loans, guarantees, and other funding mechanisms, aligning with the Facility’s objectives.
Pillar III: Technical assistance and supportive measures will assist Ukraine in aligning with EU laws and executing structural reforms on its journey to EU membership.
The proposed total budget for the Ukraine Facility is €50 billion, comprising €17 billion in grants and €33 billion in loans. However, specific budget-related issues, such as the overall size of the instrument and the distribution between grants and loans, will be determined during broader negotiations on the mid-term revision of the multiannual financial framework for 2021-2027.
This partial position will now serve as the Council’s mandate for negotiations with the European Parliament. Once an agreement is reached, formal adoption by both the Council and the European Parliament will be required.
The Ukraine Facility represents a crucial step in the EU’s commitment to supporting nations facing extraordinary challenges, promoting stability, and fostering a path toward greater unity and cooperation.
