The EU is preparing plans to gather up to 40 billion euros ($44.5 billion) in loans for Ukraine as Budapest keeps disrupting plans on a joint loan with the U.S., the Financial Times reported on Sept. 16, citing sources and a draft proposal.
The Group of Seven (G7) agreed in June to provide Kyiv with a $50 billion loan covered by proceeds from frozen Russian assets, to be delivered by the end of the year. The plan envisaged the U.S. and EU both covering $20 billion, with the remaining $10 billion to be provided by the U.K., Canada, and Japan.
The G7 countries have immobilized almost $300 billion in frozen Russian assets at the start of the full-scale invasion, with roughly two-thirds being held in the EU.
Washington's condition was the EU extending the sanctions immobilizing Russian assets. The European Commission proposed to move from the usual six-month-rolling basis to 36 months to provide stronger safeguards.
The FT wrote that Hungary has vetoed this step, hoping to push the final decision beyond the U.S. presidential election in November.
While the commission prefers the joint loan with U.S. participation, Brussels must start working on an alternative as the relevant powers expire by the end of the year, the outlet reported.
Such a proposal includes the EU raising between 20 billion euros ($22.3 billion) and 40 billion euros, with the final figure to be set after consultations between the commission and member states, officials told the FT. This move would require only majority support, circumventing Hungary's veto.
Hungarian Prime Minister Viktor Orban, seen as the most Russia-friendly EU leader, has repeatedly obstructed sanctions against Moscow and aid to Kyiv, claiming the West only prolongs and escalates the war.
Orban has maintained close relations with Republican candidate Donald Trump, a fellow right-wing populist who promised to end the war "within 24 hours." Statements from Trump's inner circle indicate this could entail pressing Ukraine to give up on its NATO aspirations, or, allegedly, to cede territory
Ukraine grows increasingly reliant on external financing as Russia's war puts ever stronger pressure on its economy. Prime Minister Denys Shmyhal said that the country faces a budget deficit of $35 billion next year, though partners have committed to cover roughly $20 billion.
Kateryna Hodunova
