Portugal supports €18B Ukraine aid Package

Portugal “is in the very large group of countries” that supports the proposal of a macro-financial aid package to Ukraine for 2023 amounting to € 18 billion, the finance minister said in Brussels on Tuesday.

Speaking to journalists at the end of meetings of finance ministers of the eurozone (Eurogroup, on Monday) and the European Union (Ecofin, on Tuesday), Fernando Medina noted that “in the meetings of these two days, we found a very broad convergence of European countries on the support package to Ukraine for 2023, amounting to €18 billion, which covers the financial needs of Ukraine for a year.”

Adding that one member state, Hungary, has expressed reservations to this macro-financial assistance package, but due to a “political framework” related to the blocking of the disbursement of funds from its own Recovery and Resilience Plan (RRP), Medina said he was hopeful that the support to Ukraine would very soon be agreed and see “the light of day”.

“The Commission’s proposal is a strong proposal because it responds to Ukraine’s needs for a significant period of one year, and it is also a very balanced proposal from the point of view of the burden that each member state will have to bear, and therefore Portugal is in the very wide group of countries that supports this Commission proposal, and we hope that it can soon see the light of day,” the minister said.

Medina explained that this funding would be “based on taking advantage of European funding that is available as a guarantee so that the EU can contract debt to support Ukraine, and the costs of this debt will then be borne by the various member states over the coming years,” in a format yet to be defined.

Questioned whether any member state opposed, Medina confirmed that there was one country that expressed doubts about the progress of this proposal, which will be formally presented tomorrow [Wednesday] by the Commission, and that is Hungary.

According to Fernando Medina, Budapest “has expressed its reservations regarding the approval of a common financing instrument, but this brings us to another debate, which has to do with Hungary’s own access to the financing of the Recovery and Resilience Plan”, as this is “the political framework where this reservation fits”.

At the formal press conference after the Ecofin Council, European Commission Executive Vice-President Valdis Dombrovskis confirmed that the EU executive would present the concrete proposal on Wednesday to provide Kyiv with €18 billion of macro-financial assistance in the form of highly concessional loans.

Dombrovskis said the aim was for the proposal – announced last Sunday by Commission President Ursula Von der Leyen in a telephone conversation with Ukraine’s President Volodymyr Zelensky – to be approved by the Council (member states) and the European Parliament later this year so that the first disbursement could take place as early as next January.