Parliament approves EU loan of up to €35 billion to Ukraine

BRUSSELS — The European Parliament approved an EU loan of up to €35 billion to Ukraine that will be repaid through the profits generated by Russian frozen assets.

Parliament voted by a majority of 518 in favor and 56 against, clearing the final hurdle for the EU to finalize the payment before an end-of-year deadline.

The EU pledged to give up to €35 billion to Ukraine, but its share will decrease if the U.S. contributes to the loan, as is widely expected.

The EU’s involvement falls within a broader G7 initiative to hand out $50 billion to support Ukraine’s war-battered economy by the end of the year.

Finance ministers from G7 countries are expected to finally agree to the carveout of the loan during an upcoming meeting in Washington on Friday.

The loan will be paid back using the profits generated by over €250 billion of Russian assets held in Western banks that were immobilized after the country’s full-scale invasion of Ukraine in Feb. 2022.

The U.K. and Canada announced they will lend respectively $3 billion and $3.6 billion to Ukraine under the G7 scheme. However, the U.S. and Japan have not yet clarified how much they will contribute.

Washington previously said that it wouldn’t be able to give a substantial amount unless the EU changed its rules governing sanctions.

The U.S. has, however, recently signaled that it may be prepared to take a big share of the loan even if Hungary continues to block a sanctions regime overhaul.