EU Ministers set for their final say on a 50-billion worth Ukraine plan

EU ministers are called upon to decide on the final green light for the Ukraine Facility’s first pillar, the debate though features with request to act more pragmatically. The macro-financial assistance package endorsed by EU leaders last February will grant Kyiv 50 billion euros until 2027. A total amount of 33 billion euros will be allocated in the form of grants with the remaining 17 billion provided as loans. The 27 EU ministers responsible for Economic Affairs convened on 14 May are asked to unlock the disbursement of 38 billion euros under the first pillar of the Ukraine Facility. The payment is indeed conditioned to the positive assessment of the reform plan submitted by the Ukrainian government on 20 March after being considered satisfying by the European Commission. 

A first debate among EU Development ministers has already been fueled by critics on the inappropriateness of the scope of the Fund for Ukrainian immediate needs. “We are spending billions to rebuild Ukraine while Russia continues to destroy Ukraine’s infrastructure”, Lithuanian Vice-Minister Simonas Satunas told his homologues during the meeting. He urged the EU Council efforts to be channeled in “consistent military support for Ukraine”. Kyiv is losing ground on the battlefield, with Ukrainian troops forced to save ammunition while waiting for new rounds of weapons to be delivered by Western allies.

Common European efforts to equip the Ukrainian army with vital missile defense systems have been irksome for a long time, with some EU countries that stand reluctant to give up a portion of their air response capacity. Endorsement to the Ukraine Plan is instead likely to face fewer hurdles. No objection was recorded during the EU Development Minister meeting, thus completing the idea that a qualified majority could be within reach for the final green light. 

The Plan submitted by Kyiv is based on 69 reform measures and 10 investments in sectors such as energy, agriculture, transport, critical raw materials and state-owned enterprises. It addresses improvements in public administration, emphasizing good governance, adherence to the rule of law and fighting corruption and fraud. It is also linked with preparatory reforms and investments for Ukraine’s accession to the EU. A quarterly base implementation assessment will scan the timeline for additional disbursements. The full potential of the Ukraine Facility is estimated at a possible increase of 6.2% of national GDP by 2027 and 14.2% by 2040.

Aid to the Palestinian displaced population in Gaza was also discussed by EU Ministers. The meeting ended with no common position on the resumption of financial support to UNRWA, the United Nations Agency which provides relief to all Palestine Refugees in the Near East. The Agency has lost its reputation over the last few months as Israel brought charges on the involvement of 12 employees in the Hamas attack of 7th October.

As claimed by a source informed on the results of the EU Development Council, not all of the 27 ministers acknowledge the essential role of UNRWA in humanitarian aid supply. Most of them endorsed the work of the review group appointed by the United Nations and led by former French Foreign Minister Catherine Colonna, assessing that UNRWA has done everything in its power to ensure neutrality. The EU High Representative Josep Borrell stressed in its press statement the need for all EU Member States to back the work of the UN Agency. 

EU ministers finally agreed on the entry into force of the regulation allocating 6 billion euros to Western Balkans to guide them through the path towards EU membership. The Growth Facility for the region will bolster reforms in the six concerned countries with fine attention to ease economic convergence with EU countries. 

Half of the budget will be financed through grants and loans under the Western Balkans investment framework (WBIF) and mainly devoted to investments in infrastructure projects. The remaining three billion will be disbursed in the form of loans and directly distributed to Western Balkan partners’ budgets. They will accelerate growth based on key socio-economic reforms. Payments will be made twice a year, provided that the Balkan governments meet the qualitative and quantitative steps set out in their respective reform agendas.