EU countries agree upon legal framework for extending 90-bln-euro loan to Ukraine

BRUSSELS. Feb 4 (Interfax) - The Council of the European Union announced on Wednesday that it agreed upon a legal framework for implementing the European Council agreement to provide a 90 billion euro loan to Ukraine in 2026-2027.

"Today's agreement shows that the EU continues to act decisively in support of Ukraine and its people," Makis Keravnos, the finance minister of Cyprus, which currently holds the Council of the EU presidency, said in a statement.

"At the same time, we are sending a strong signal that the sovereignty and territorial integrity of states must be fully respected, in accordance with international law," he said.

The Council said in a communique on Wednesday that it "now aims for a speedy agreement with the European Parliament to allow the first payment to be disbursed early in the second quarter of this year."

The loan "will specifically aim to support Ukraine's general budget and defense needs," it said.

The loan will be financed through EU borrowing on the capital markets and will be backed by the EU budget. "The loans will become repayable only once Russia has paid war reparations to Ukraine," it said.

Furthermore, "the financing will help strengthen the European and Ukrainian defense industries," it said.

The decision "was taken through the enhanced cooperation procedure with the participation of 24 member states," it said.

The EU will make funding available to Ukraine in two ways, the communique said. Under the proposed framework, 30 billion euros will be provided as macroeconomic support to Ukraine, channeled via macro-financial assistance (MFA) or implemented through the Ukraine Facility, the EU's dedicated instrument for providing Ukraine with stable and predictable financial support, it said.

Another 60 billion euros will be used to support Ukraine in investing in its defense industry and to procure military equipment. "The funding will give Ukraine crucial and timely access to defense products from both the Ukrainian and EU defense industries," it said.