BRUSSELS (Reuters) – European Union countries on Tuesday approved new aid to Ukraine as the country faces mounting economic damage from the Russian invasion.
Finance ministers from the 27 EU countries on Tuesday gave the go-ahead for 1 billion euros ($1 billion) in loans to the Ukrainian government.
This sum brings to €2.2 billion the total amount of EU macro-financial assistance to Kyiv This year. An initial €1.2 billion EU loan package was given the green light by the bloc’s finance chiefs days before Russia’s large-scale attack on February 24.
The European Commission, the executive arm of the EU, in mid-May offered additional aid of up to 9 billion euros to Ukraine. The planned €1 billion payout is part of the move, which comes as Russia advances in eastern Ukraine and mounting casualties on both sides.
“This will give Ukraine the necessary funds to cover urgent needs and ensure the functioning of critical infrastructure,” said Zbynek Stanjura, Minister of Finance of the Czech Republic, which currently holds the rotating EU presidency, in a statement. communicated.
Ukraine said last week that its post-war reconstruction would cost $750 billion. Meanwhile, it is estimated that the government of Kyiv needs around 5 billion euros per month to keep the economy afloat.
Group of Seven countries, including the United States, have pledged to help Ukraine meet its short-term financing needs in addition to providing military aid to Kyiv and imposing far-reaching economic sanctions against Russia.
The five-month-long war is having economic and social repercussions around the world, ranging from possible food shortages in Africa to disruptions in energy supplies in the EU. These in turn increase the risk of a global recession.
On Thursday, the EU is expected to revise its forecast for bloc-wide economic growth in 2022 down for the third time this year.
In May, the European Commission predicted that the EU’s gross domestic product would grow by 2.7% in 2022, lowering a forecast made in February of 4% growth. The February outlook was itself weaker than a November projection of 4.3% EU GDP growth this year.
Over the past two months, Russia has halted or reduced natural gas deliveries to more than 10 EU countries and inflation in Europe has continued to rise. In June, inflation in the 19 countries that share the euro hit a record high of 8.6%.
Finance ministers from the 27 EU countries on Tuesday gave the go-ahead for 1 billion euros ($1 billion) in loans to the Ukrainian government.
This sum brings to €2.2 billion the total amount of EU macro-financial assistance to Kyiv This year. An initial €1.2 billion EU loan package was given the green light by the bloc’s finance chiefs days before Russia’s large-scale attack on February 24.
The European Commission, the executive arm of the EU, in mid-May offered additional aid of up to 9 billion euros to Ukraine. The planned €1 billion payout is part of the move, which comes as Russia advances in eastern Ukraine and mounting casualties on both sides.
“This will give Ukraine the necessary funds to cover urgent needs and ensure the functioning of critical infrastructure,” said Zbynek Stanjura, Minister of Finance of the Czech Republic, which currently holds the rotating EU presidency, in a statement. communicated.
Ukraine said last week that its post-war reconstruction would cost $750 billion. Meanwhile, it is estimated that the government of Kyiv needs around 5 billion euros per month to keep the economy afloat.
Group of Seven countries, including the United States, have pledged to help Ukraine meet its short-term financing needs in addition to providing military aid to Kyiv and imposing far-reaching economic sanctions against Russia.
The five-month-long war is having economic and social repercussions around the world, ranging from possible food shortages in Africa to disruptions in energy supplies in the EU. These in turn increase the risk of a global recession.
On Thursday, the EU is expected to revise its forecast for bloc-wide economic growth in 2022 down for the third time this year.
In May, the European Commission predicted that the EU’s gross domestic product would grow by 2.7% in 2022, lowering a forecast made in February of 4% growth. The February outlook was itself weaker than a November projection of 4.3% EU GDP growth this year.
Over the past two months, Russia has halted or reduced natural gas deliveries to more than 10 EU countries and inflation in Europe has continued to rise. In June, inflation in the 19 countries that share the euro hit a record high of 8.6%.
