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REPORT (COM(2023)0338 – C90210/2023 – 2023/0200(COD))

On the proposal for a regulation of the European Parliament and of the Council on establishing the Ukraine Facility

A-9-2023-0286

Committee on Foreign Affairs Committee on Budgets · Rapporteur: Michael Gahler, Eider Gardiazabal Rubial

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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 Commission proposal sets up the Ukraine Facility, a single instrument providing up to EUR 50 billion for 2024-2027 through three pillars: support for the Ukraine Plan, an investment framework and accession assistance. Support is conditional on Ukraine upholding democracy, the rule of law and human rights, and on fulfilling reform and investment steps set out in a Ukraine Plan prepared by its government and approved by the Verkhovna Rada. The text lays down rules on concessional loans, a Ukraine Guarantee for private investment, transparency of beneficiaries, an independent Audit Board and protection of the Union's financial interests. It provides for possible additional revenue from confiscated Russian assets and asks the Union to establish a legal basis for confiscating Russian public assets to finance reconstruction.

Committee position. The committees adopt Parliament's position at first reading, amending the Commission proposal to set up the Ukraine Facility with three pillars, a EUR 50 billion envelope, a Ukraine Plan, a Ukraine Guarantee, an Audit Board and rules on transparency and protection of Union financial interests.

Key points

  1. The Facility provides assistance to Ukraine under three pillars: financial support for the Ukraine Plan and macro-financial stability, a Ukraine Investment Framework, and accession assistance.
  2. The overall maximum Union support is EUR 50 billion in current prices for 2024 to 2027, with an indicative distribution of 75% non-repayable support, 16% for the investment framework and 8% for accession assistance.
  3. Loans of up to EUR 50 000 000 000 may be provided for 1 January 2024 to 31 December 2027, with a maximum duration of 35 years and no repayment of principal before 2034.
  4. Support is conditional on Ukraine continuing to uphold democratic mechanisms, the rule of law, human rights and free and fair elections; the Commission may suspend payments if this precondition is not met.
  5. Ukraine must prepare a Ukraine Plan, approved by the Verkhovna Rada, setting out reforms and investments with measurable steps to be completed by 31 December 2027; measures started from 1 January 2023 are eligible.
  6. Payments are made quarterly upon satisfactory fulfilment of conditions; unfulfilled steps lead to withholding, and amounts may be reduced if Ukraine does not take the necessary measures within twelve months.
  7. Ukraine must publish data on persons and entities receiving more than EUR 100 000 and on the 2 000 largest final beneficiaries, and beneficial owner disclosure is a mandatory precondition for funding.
  8. A Ukraine Guarantee of EUR 8 914 000 000 in current prices is established, with at least 35% of guarantees under Pillar II supporting micro, small and medium-sized enterprises, including start-ups.
  9. An independent Audit Board is set up to report on mismanagement, appoint an external auditor and recommend recovery of amounts; it must report criminal conduct to the European Public Prosecutor's Office.
  10. The Commission may reduce support or ask for early repayment of loans in cases of serious deterioration of the rule of law, irregularities, fraud, corruption or conflicts of interest not corrected by Ukraine.
  11. The Union and member states should establish a legal basis for confiscating Russian public assets to finance reconstruction, and any such amounts may be added to the Facility as external assigned revenue used as grants.
  12. At least 20% of the Ukraine Plan's total allocation should contribute to climate change mitigation and adaptation, environmental protection and the green transition, based on a climate tracking methodology.

Who is affected

  • Ukraine: receives grants and concessional loans, must prepare and implement the Ukraine Plan and meet reform and transparency conditions.
  • Ukrainian regions, municipalities and civil society: must be consulted and involved in the Plan, with at least 15% of non-repayable support for sub-national authorities.
  • Private companies, municipalities and state-owned enterprises in Ukraine: can receive investment support through the Ukraine Investment Framework and the Ukraine Guarantee.
  • Member States, third countries and international organisations: may make additional contributions to the Facility's pillars and the Ukraine Guarantee.
  • Entities under oligarchic influence: are excluded from receiving funds under the Facility through a register of companies.

Figures and deadlines

  • EUR 50 billion: overall maximum Union support for 2024 to 2027.
  • EUR 50 000 000 000: maximum amount of loan support for 1 January 2024 to 31 December 2027.
  • EUR 8 914 000 000: amount of the Ukraine Guarantee in current prices.
  • 35 years: maximum duration of loans to Ukraine.
  • 2034: year before which repayment of loan principal must not start.
  • 31 December 2027: deadline for qualitative and quantitative steps under the Ukraine Plan.
  • EUR 100 000: threshold above which funding recipients must be published.
  • 20%: minimum share of the Ukraine Plan's total allocation for climate and environmental objectives.

Legal basis: Article 212 and Article 322(1) of the Treaty on the Functioning of the European Union.