Home youth program budget EU ministers back $5 billion loan to Ukraine, discuss long-term options

EU ministers back $5 billion loan to Ukraine, discuss long-term options

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European Union flags fly outside the European Central Bank (ECB) headquarters in Frankfurt, Germany April 26, 2018. REUTERS/Kai Pfaffenbach/

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PRAGUE, September 9 (Reuters) – European Union finance ministers on Friday backed a 5 billion euro ($5 billion) loan to Ukraine to help it maintain its schools, hospitals and other operations necessary in its fight against the Russian invasion.

Meeting in Prague, the ministers also discussed longer-term options to help Ukraine finance its reconstruction in the future, as well as possible other options for granting short-term financing.

EU countries have provided continued support with financial and military aid to Ukraine as Kyiv seeks to reclaim land from Russia since it launched what Moscow calls a ‘special operation’ in February.

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The €5 billion loan agreed on Friday, which will be backed by guarantees from EU member states, is part of a €9 billion overall package announced in May.

The first billion euros was fully sent out in early August, while Czech Finance Minister Zbynek Stanjura said upcoming meetings would decide how the remaining 3 billion euros in the package could be divided into loans or in grants.

“All member states have agreed on additional support for Ukraine, Stanjura said.

A report released Friday by the World Bank, the Ukrainian government and the European Commission calculated that the Russian invasion had caused more than $97 billion in direct damage to Ukraine through June 1, as the country’s reconstruction could cost close to $350 billion. Read more

European Commission Vice-President Valdis Dombrovski said the costs to help rebuild Ukraine would be immense as the war drags on into a seventh month.

“It is clear that Ukraine needs short-term financial assistance to keep the country running on a daily basis and to maintain essential services,” he said.

“We must also look beyond the immediate needs, as the long-term costs of rebuilding Ukraine are likely to continue to rise as long as the war continues.”

The EU executive is already examining legal obstacles to using confiscated Russian assets to help cover the costs of rebuilding Ukraine, while ministers discussed other long-term financing options, without providing details.

Stanjura said ministers were also looking at other options for shorter-term funding that might be needed beyond the €9 billion package already disbursed in stages.

($1 = 0.9954 euros)

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Reporting by Jason Hovet; Editing by Alexander Smith and Jonathan Oatis

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