European Parliament Approves €35 Billion Loan for Ukraine

On October 22, the European Parliament voted in favor of a €35 billion loan to Ukraine, a key component of the broader G7 financial assistance plan. This loan, part of the EU’s macro-financial assistance framework, will be funded through future revenues generated from frozen Russian assets.

The measure received significant support, with 518 members of the European Parliament voting in favor, 56 against, and 61 abstaining. The loan is intended to provide Ukraine with financial support until the end of 2025, helping to strengthen its energy sector and defense capabilities.

The loan forms part of the G7’s broader commitment to provide up to $50 billion in financial assistance to Ukraine. However, the final amount provided by the EU may vary depending on contributions from other G7 nations.

The mechanism for repaying this loan is tied to revenues from frozen assets of the Central Bank of Russia, held within the European Union. These funds will be allocated toward servicing and repaying loans provided by the EU and other G7 partners. Ukraine will have flexibility in how it utilizes the funds provided by the EU.

This loan follows a prior commitment made during European Commission President Ursula von der Leyen’s visit to Kyiv in September, where she announced the EU’s plan to contribute to the G7 financial package. The loan package was further endorsed by the EU Council on October 9.

While the funds are expected to be provided by the end of 2025, their disbursement will be contingent upon Ukraine fulfilling conditions outlined in a memorandum of understanding, including the maintenance of democratic processes and human rights.

Earlier, Britain pledged a new loan of $2.94 billion (£2.26 billion) to Ukraine as part of the G7's Extraordinary Revenue Acceleration (ERA) Loans initiative, which aims to collectively provide $50 billion for military, budgetary, and reconstruction efforts. The loan, announced by Chancellor Rachel Reeves and Defense Secretary John Healey during a visit to Ukrainian personnel training in the UK, will be repaid through profits from frozen Russian assets.

Following the European Parliament’s approval, the regulation will be adopted by the EU Council and come into force the day after its publication in the EU’s Official Journal.