EU agrees $50B funding deal for Ukraine at pivotal time in the war

By Luke McGee, CNN

(CNN) — The European Union agreed a funding deal worth more than $50 billion for Ukraine in a crucial summit on Thursday that comes at a pivotal moment in the war.

The funds had been blocked since December after Hungary’s Prime Minister Viktor Orban had vetoed the deal at a previous summit. Failure to have reached an agreement would have been a major blow to Ukraine, at a time when its outmanned and outgunned forces are struggling on the battlefield amid a renewed Russian assault. Meanwhile, military aid from the United States has dried up amid an ongoing battle in Washington over future funding for Kyiv.

An official text, published by the EU Council, said that the 27 member states had approved €50 billion ($54 billion) to be sent to Ukraine from 2024 to 2027. It detailed €33 billion “in the form of loans” and €17 billion in “non-repayable support” that could be “generated from frozen Russian assets. The text makes multiple mentions of the money being used as part of Ukraine’s path to joining the bloc.

“We have a deal. #Unity All 27 leaders agreed on an additional €50 billion support package for Ukraine within the EU budget,” the EU Council’s President Charles Michel wrote on X, formerly known as Twitter. “This locks in steadfast, long-term, predictable funding for #Ukraine.

“EU is taking leadership & responsibility in support for Ukraine; we know what is at stake.”

Ukraine’s President Volodymyr Zelensky gave his backing to the decision after it was announced. “Grateful to @CharlesMichel and EU leaders for establishing the €50 billion Ukraine Facility for 2024-2027,” he tweeted.

“It is very important that the decision was made by all 27 leaders, which once again proves strong EU unity.

“Continued EU financial support for Ukraine will strengthen long-term economic and financial stability, which is no less important than military assistance and sanctions pressure on Russia.”

A senior European diplomat told CNN that the deal agreed between the bloc’s 27 members would require a yearly discussion and a review in two years “if needed.” They explained that this language was crucial because it didn’t give Orban a blanket veto later down the line.

Close ties to Putin

Orban had held up the deal on the grounds he did not want the funds to come from the EU budget, meaning funds would be taken from EU member states and sent to Ukraine. He also said Hungary could only agree to sending the money if there was an annual review.

Critics of Orban were quick to accuse him of blocking the deal because the EU is currently withholding funds for Hungary due to it breaching rule of law requirements. Orban and members of his government have repeatedly denied that there is any connection between the two, or that they have breached EU rules.

The diplomat said the deal as outlined by Michel does not unlock EU funds for Hungary, though the summit will continue throughout Thursday.

European officials had feared that Orban would continue blocking the deal not only because of money to Hungary being frozen by Brussels, but also because of his unusually close relationship with Russian President Vladimir Putin.

Orban’s critics across Europe believe that he was leveraging that relationship in order to bully his European allies by playing the part of a Kremlin stooge: Act tough on support for Ukraine, a key priority for most of Europe, in exchange for concessions in other areas.

On the eve of the summit, EU foreign affairs chief Josep Borrell admitted that the bloc would only send around half of the 1 million artillery shells it had pledged to Ukraine by March, shifting the self-imposed deadline to the end of the year. “There was some initial inertia, but then once things get set in motion, they can speed up,” Borrell said, according to Reuters.

European ammunition supplies have been under increased scrutiny since the start of the war, with fears that stocks are much lower than would be needed were a wider war to break out across the continent. Officials privately admit fear this means that over time, Ukraine’s Western allies will be reluctant to hand over military equipment they might need later down the line.

Correction: This story has been updated to correct that it is Hungary, not Ukraine, that faced having money frozen by Brussels.

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.