EU Pledges ₹35 Billion Loan to Support Ukraine’s Recovery

September 21, 2024

The European Union (EU) has promised to lend Ukraine up to ₹35 billion (about $39 billion) to help the country recover from the ongoing war with Russia, which started in February 2022. This loan is part of a larger financial aid package that is being coordinated by the G7 nations, a group of the world’s largest economies, to support Ukraine during this difficult time.

G7 Loan Agreement

The G7 leaders agreed to provide Ukraine with a total loan package of $50 billion. This money is meant to help rebuild Ukraine’s economy and repair important infrastructure, especially its power systems, which have been badly damaged by the war.

The loans will be funded using money earned from the interest on Russian central bank assets that have been frozen due to the conflict. This means that Russia’s own money will be used to help pay for the damage caused by its invasion of Ukraine. However, there have been some delays in distributing the loan due to complications in setting up this funding system.

EU’s Previous Support for Ukraine

The EU has already provided over ₹118 billion euros (about $132 billion) to Ukraine in different forms of military and economic aid since the war began. This new loan is crucial because Russia’s ongoing attacks continue to threaten Ukraine’s stability and make recovery even harder.

According to European Commission President Ursula von der Leyen, this loan will be a big help for Ukraine’s national budget. It will make the country more financially stable and give Ukraine the flexibility to use the money where it’s needed most. Ukraine will decide how to spend these funds based on its most urgent needs.

Implementation Timeline

Von der Leyen is confident that the loan will be delivered to Ukraine quickly. The EU expects that other G7 countries will also send their financial assistance soon, helping Ukraine rebuild its critical infrastructure and improve its defense capabilities.

Ukraine’s Plans for Reconstruction

President Volodymyr Zelenskyy has outlined how Ukraine plans to use the funds. The priorities include:

Rebuilding energy facilities that were destroyed in the war.
Constructing bomb shelters to protect civilians.
Improving schools and educational facilities to ensure children can continue their education.
Buying military resources to defend against further attacks.

More About the European Union

The European Union (EU) started in 1957 as the European Economic Community. Today, it has 27 member countries, and 19 of them use the euro as their currency. The Schengen Area allows people to travel between 26 nations without needing a passport. The EU is known for its Common Agricultural Policy, which uses about 36% of its budget to support farming. In 2012, the EU won the Nobel Peace Prize. Its European Court of Justice makes sure EU laws are applied the same way in all member countries, and the European Parliament has 705 members. The EU’s motto is “United in Diversity”, and it works hard to protect the environment through the Green Deal initiatives.

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