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REPORT (COM(2024)0426 – C100106/2024 – 2024/0234(COD))

On the proposal for a regulation of the European Parliament and of the Council establishing the Ukraine Loan Cooperation Mechanism and providing exceptional macro-financial assistance to Ukraine

A-10-2024-0006

Committee on International Trade · Rapporteur: Karin Karlsbro

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Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's amended version of the proposed regulation establishes the Ukraine Loan Cooperation Mechanism and provides exceptional macro-financial assistance to Ukraine, using windfall profits from immobilized Russian assets to repay loans. It sets up a new macro-financial assistance instrument of up to €35 billion and a mechanism supporting loans up to €45 billion, with Ukraine not required to repay directly. The text includes conditions for Ukraine, such as democratic mechanisms and rule of law, and calls for swift adoption by end of October 2024.

Committee position. The Committee on International Trade recommends approval of the Commission proposal without amendments, as adopted in Parliament's position.

Key points

  1. Establishes the Ukraine Loan Cooperation Mechanism to provide non-repayable support for Ukraine to repay loans, endowed mainly by transfers from immobilized Russian assets, up to €45 billion.
  2. Creates a new macro-financial assistance instrument for Ukraine of up to €35 billion, over 45 years, with no grace period for repayment.
  3. Ukraine must meet preconditions including effective democratic mechanisms, multi-party parliamentary system, rule of law, and respect for human rights.
  4. The Commission will negotiate a Memorandum of Understanding with Ukraine, consistent with the Ukraine Plan, and must consult the Verkhovna Rada and involve civil society.
  5. The External Action Guarantee will not be used; guarantees are provisioned by the headroom, and caution is urged to avoid jeopardizing financial stability.
  6. Derogation from provisioning rate under the Financial Regulation is noted; mandatory provisions in the MFA Loan Agreement include early repayment in case of fraud or corruption.
  7. Repayment arrangements include a waterfall structure; information must be transmitted to Parliament and Council for oversight.
  8. Regrets lack of clarity on final liability of the Union budget and requests clarification on interplay with Ukraine Facility funding.
  9. Requests details on aggregation of liabilities and notes that extending the ability to treat assistance like Member State assistance requires further MFF amendment.
  10. Calls for approval of the proposal, emphasizing urgency and the need for swift adoption.

Who is affected

  • Ukraine: receives macro-financial assistance and loan support, subject to conditions and repayment via windfall profits.
  • EU institutions: Commission manages the mechanism and negotiates agreements; Parliament and Council oversee.
  • Russian state assets: immobilized assets generate windfall profits used for repayments.

Figures and deadlines

  • €45 billion: total loans supported by the Ukraine Loan Cooperation Mechanism.
  • €35 billion: amount of macro-financial assistance proposed.
  • 45 years: duration of the MFA instrument.
  • €210 billion: Russian Central Bank assets held in the EU.
  • USD 50 billion: G7 loan to Ukraine.
  • USD 38 billion: Ukraine's financing needs for 2025.

Legal basis: Article 212 and Article 294(2) of the Treaty on the Functioning of the European Union