Proposal for a Regulation on establishing the Ukraine Facility

Summary:

Legislative initiative tabled by the European Commission on 20 June 2023, establishing a dedicated financing instrument to provide support to Ukraine for the period 2024-2027.

Further information:

Russia launched a full-scale military invasion of Ukraine in February 2022, with devastating consequences for the country and its people. Months of fighting, shelling and airstrikes resulted in high numbers of civilian casualties, extensive damage to infrastructure and services, and destruction of cities and towns. The European Union (EU) provided wide-ranging support to Ukraine and its people, amounting to €70 billion by May 2023. It also imposed sanctions against Russia.

Due to the scale and complexity of the challenges involving the reconstruction of Ukraine and the country's EU accession, the European Commission has deemed necessary the establishment of a longer-term solution to ensure that funding is well coordinated and used efficiently. This draft law introduces a new instrument named Ukraine Facility. It seeks to cater for short-term recovery needs and medium-term reconstruction and modernisation of Ukraine. The proposed Facility is organised around three pillars:

• Pillar One covers financial support in the form of both non-repayable support and loan support to Ukraine;
• Pillar Two is a Ukraine Investment Framework, designed to attract private and public investments in Ukraine's recovery and reconstruction;
• Pillar Three provides technical assistance and other supporting measures.

The draft law was adopted by the European Commission on 20 June 2023 alongside the mid-term review of the EU's Multiannual Financial Framework (MFF).

• Primary Source

Commentary and Analysis

Politico, 19/06/2023: EU budget top-up for Ukraine is a hard sell https://www.politico.eu/article/brussels-budget-eu-commission-covid-inlfation-to-ask-a-top-up-for-eu-coffers-but-its-a-hard-sell/

EurActiv: Opinion, 20/06/2023: Ukraine’s reconstruction is Europe’s opportunity https://www.euractiv.com/section/europe-s-east/opinion/ukraines-reconstruction-is-europes-opportunity/

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News

Politico, 14/06/2023: EU plans up to €72 billion in aid for Ukraine https://www.politico.eu/article/eu-plans-e72-billion-of-new-common-debt-to-aid-ukraine/

TVP World, 16/06/2023: EU proposes budget adjustment to assist Ukraine https://tvpworld.com/70606726/eu-proposes-budget-adjustment-to-assist-ukraine

Reuters, 20/06/2023: EU offers Ukraine 50 billion euros through 2027 https://www.reuters.com/world/europe/eu-unveil-50bln-euro-aid-package-ukraine-sources-2023-06-20/

Euronews, 20/06/2023: Brussels asks EU countries for more money for Ukraine and to plug budget gaps https://www.euronews.com/my-europe/2023/06/20/brussels-asks-eu-countries-for-more-money-for-ukraine-and-to-plug-budget-gaps

The Brussels Times, 20/06/2023: European Commission earmarks €50 billion for Ukraine in adjusted budget proposal https://www.brusselstimes.com/563448/european-commission-earmarks-e50-billion-for-ukraine-in-adjusted-budget-proposal

Bloomberg, 20/06/2023: EU Readies €50 Billion Ukraine Package Ahead of Donor Summit https://www.bloomberg.com/news/articles/2023-06-20/eu-readies-50-billion-ukraine-package-ahead-of-donor-summit#xj4y7vzkg

France24, 20/06/2023: EU proposes 50 bn-euro package to support Ukraine https://www.france24.com/en/live-news/20230620-eu-proposes-50-bn-euro-package-to-support-ukraine

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Official

European Commission: Recovery and reconstruction of Ukraine https://eu-solidarity-ukraine.ec.europa.eu/eu-assistance-ukraine/recovery-and-reconstruction-ukraine_en

European Commission: Press Release, 20/06/2023: Ukraine: Commission proposes to set up a dedicated Facility to support Ukraine's recovery, reconstruction and modernisation https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3355

European Commission: Questions and Answers – A new Ukraine Facility (20 June 2023) https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_3353

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