A long-term solution for Ukraine’s funding needs

Parliament’s stance on the proposed Ukraine Facility was adopted with 512 votes in favour, 45 against and 63 abstentions, with MEPs making the Facility more democratically accountable, encouraging multiparty democracy and Ukraine’s alignment with the requirements for EU accession.

Urgent adoption needed in line with the EU’s long-term budget revision

The Ukraine Facility is part of the ongoing revision of the EU’s long-term budget, for which adjustments are needed, as it has been severely depleted following the multiple crises that have occurred since 2021. MEPs insist that the Facility, along with the entire budgetary revision, should be agreed as soon as possible, as there will be no provisions for assistance to Ukraine from 2024. The package should be integrated also into next year’s annual budget, to be negotiated in November.

Using Russian assets, fighting corruption

One of MEPs’ key demands is that assets from the Russian Federation or other entities or individuals directly connected with Russia’s war of aggression be used to reconstruct Ukraine. Parliament strengthened the provisions on the fight against fraud, corruption, conflicts of interest and irregularities in the use of EU funds in Ukraine. Companies under oligarchic influence should not be eligible for funding, MEPs added.

More transparency, closer involvement of Parliament

MEPs amended the proposal also to make the Facility more transparent with the creation of a web portal on financial operations granted to Ukraine and its objectives, and on the “milestones” met by the country in order to receive the aid. They also want contributions received from third countries and international organisations to be made public.

The plan, in which Ukraine will detail the reforms and investments to be supported by the EU, should be established with Parliament’s involvement (via delegated acts) and an effective consultation of the Verkhovna Rada.

Next steps

Negotiations with the member states can start as soon as the Council agrees on a common position.

Quotes

Michael Gahler (EPP, DE), co-rapporteur for the Committee on Foreign Affairs, said: “The European Parliament is taking decisive action with the Ukraine Facility, directing €50 billion towards profound societal transformation. We are increasing the accountability of the Facility, ensuring it not only fosters resilience and prosperity but does so with unparalleled transparency. As Ukraine embarks on this critical journey, our collective vigilance will safeguard the integrity of it every step towards European integration.”

Eider Gardiazabal Rubial (S&D, ES), co-rapporteur for the Committee on Budgets, said: “The EU reaffirms its solidarity with Ukraine through the €50 billion Ukraine Facility, supporting the country’s resilience against aggression and aiding reforms in he context of potential EU accession. We urge member states to allow the use of frozen Russian assets to fund Ukraine’s reconstruction, and underline the importance of the involvement of the Verkhovna Rada and Ukrainian civil society in the preparation of EU financial support.”

Background

On 20 June 2023, the Commission proposed to set up a dedicated “Ukraine Facility”, with up to €50 billion for the period from 2024 to 2027 in the form of grants and loans.

The facility will replace the bilateral support currently provided by the EU under the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI) and the €18 billion MFA+ programme, which will run out at the end of 2023. It will integrate the support Ukraine would have received under the Instrument for Pre-accession Assistance (IPA).