Ukraine's parliament approved legislation on May 28 to receive a 90 billion euro ($104 billion) loan from the European Union, ending months of delay caused by Hungary's veto [1, 2, 3]. The loan had been blocked until the new Hungarian government lifted the veto last month, allowing the EU to finalize its support package [1, 2].
European Council President Charles Michel announced the EU's approval of the 90 billion euro loan on April 23. He said the EU had pledged the funds to support Ukraine's defense and budget needs amid the ongoing war [3]. According to Ukraine’s finance minister, 60 billion euros of the loan will be directed to strengthening the defense industry, while 30 billion euros will provide budget support [3].
Ukraine is in its fifth year of facing a full-scale Russian invasion and relies heavily on foreign aid for social programs and humanitarian assistance [1, 2]. The loan agreement ties disbursements to reforms. Of the total, 8.35 billion euros will be paid in three instalments this year, contingent on Ukraine passing tax reforms demanded by the International Monetary Fund (IMF) [1, 2]. These reforms include a tax on income earned via digital platforms, although a tax proposed on parcels from abroad recently failed in parliament [1, 2].
Finance minister Martchenko said Ukraine will repay the loan only if Russia pays war reparations, with repayments deducted from Russian compensation for the invasion. He stated, “Ukraine will only repay this loan if Russia pays war reparations; loan repayments will be deducted from Russian compensation” [3].
Parliament is also expected to vote soon on budget amendments to increase military spending supported by the EU loan [1, 2].
The IMF’s monitoring mission arrived in Kyiv on May 27 to begin the first review of its $8.1 billion lending program approved in February, highlighting ongoing coordination of international financial aid to Ukraine [1, 2, 3].
