How the EU secured €50 billion for Ukraine and what it means for Europe's security
The European Union has reached a historic agreement to provide €50 billion ($54 billion) in financial aid to Ukraine, overcoming Hungary's veto after intense negotiations. The deal, announced by European Council President Charles Michel on Thursday, is a major boost for Ukraine's President Volodymyr Zelenskiy, who is facing a Russian military threat on his borders. It also shows the EU's solidarity and unity in supporting a key partner and countering Moscow's aggression.
The agreement was made possible by a compromise between Hungarian Prime Minister Viktor Orban and other EU leaders, including German Chancellor Olaf Scholz, French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni. Orban had blocked the aid package for weeks, demanding a veto right over its implementation and accusing the EU of interfering in Hungary's domestic affairs. He also claimed that the aid would benefit oligarchs and corrupt officials in Ukraine, rather than ordinary people.
The EU leaders persuaded Orban to drop his veto by agreeing to a review mechanism that would ensure the rational use of the funds and respect for the rule of law in Ukraine. The member states agreed to debate the implementation of the aid package every year and, if needed, the European Commission could be asked to propose a review in two years, according to a draft document seen by Bloomberg News. The Hungarian leader also hailed the positive market reaction to the deal, as the forint gained 0.2% against the euro on Thursday.
The aid package consists of €30 billion in grants and €20 billion in loans, which will be disbursed over seven years. It is part of the EU's broader strategy to support Ukraine's economic and political reforms, as well as its integration into the European market and society. The funds will be used for various purposes, such as infrastructure development, energy efficiency, digital transformation, health care, education and civil society.
The deal is also a significant contribution to Europe's security and stability, as it aims to strengthen Ukraine's resilience and deterrence against Russia's aggression. Ukraine has been locked in a conflict with Russia since 2014, when Moscow annexed Crimea and backed separatist rebels in eastern Ukraine. The situation has escalated in recent months, as Russia amassed more than 100,000 troops near Ukraine's borders and threatened to invade if Kyiv did not accept its demands.
The EU has been one of Ukraine's main allies and supporters since the outbreak of the crisis, imposing sanctions on Russia and providing diplomatic and financial assistance to Kyiv. However, the bloc has also faced criticism for its slow and cautious response to Moscow's provocations and its reluctance to provide military aid or offer a clear membership perspective to Ukraine. The US has been more vocal and active in backing Ukraine, pledging $61 billion in assistance that is yet to be approved by Congress.
The EU's €50 billion aid package is therefore a welcome sign of solidarity and commitment from Brussels, which could help boost Kyiv's confidence and morale. It could also send a clear message to Moscow that the EU stands by Ukraine's sovereignty and territorial integrity and will not tolerate any further violations of international law. The deal could also pave the way for more cooperation and coordination between the EU and the US on how to deal with Russia and support Ukraine.
The agreement is not without challenges and risks, however. The implementation of the aid package will require close monitoring and oversight from both sides, as well as transparency and accountability from Kyiv. The EU will have to ensure that the funds are used effectively and efficiently, without falling into the hands of corrupt or dubious actors. The Ukrainian government will have to demonstrate its commitment to reform and fight against corruption, as well as respect for human rights and democracy.
Moreover, the agreement does not guarantee that Russia will refrain from further aggression or escalation. Moscow may see the deal as a provocation or a threat, rather than an incentive for dialogue or de-escalation. The Kremlin may also try to undermine or sabotage the aid package by increasing its pressure or propaganda on Ukraine or its allies. The EU will have to remain vigilant and ready to respond to any potential challenges or crises that may arise from Russia's actions.
The EU's €50 billion aid package for Ukraine is a historic achievement that could have positive implications for Europe's security and stability. It is also a testament to the EU's solidarity and unity in supporting a key partner and countering Moscow's aggression. However, the deal also entails challenges and risks that will require careful management and cooperation from both sides. The EU will have to ensure that the funds are used wisely and effectively, while Ukraine will have to prove its readiness and willingness to reform and integrate into Europe.
References:
: [EU Breaks Deadlock on €50 Billion for Ukraine as Orban Caves](https://finance.yahoo.com/news/eu-breaks-deadlock-50-billion-112735535.html)