EU's 20 billion euros contingency plan for Ukraine

The European Union is preparing a contingency plan for Ukraine aimed at providing financial support in the amount of 20 billion euros, the Financial Times reports. This step is a response to the veto of Hungarian Prime Minister Viktor Orban, which jeopardizes the implementation of the previous initiative.

It is noted that if Orban does not override his veto at the summit scheduled for February 1, a different approach will be taken. The new scheme provides for guarantees from EU member states to the European Commission's budget, which for the first time will allow it to borrow up to 20 billion euros in the capital markets in favor of Ukraine.

The exact terms of this plan are still being finalized, but it is already expected that the countries with the highest credit ratings will be the main participants in this financial measure. This approach will avoid the need to obtain guarantees from all 27 EU member states, ensuring unanimous support for funding for Ukraine.

However, unlike the previous proposal, which envisaged the allocation of funds from the EU budget, the new scheme is limited to loans and does not include grants. Nevertheless, EU member states still retain the option to provide grants on a bilateral basis.

Approval from the parliaments of some countries, such as Germany and the Netherlands, will be an important step for the provision of guarantees under this new financial plan.

Although the new scheme has its limitations, it offers the prospect of significant financial support for Ukraine if the previous approach fails. Developments on this issue remain a topic of discussion and promise to address important financial issues for the country in the face of geopolitical turbulence.