The EU has revised its decision on the first €3.2 billion for Ukraine: where will the money go
24 June 23:57
The European Union is preparing to transfer the first tranche of 3.2 billion euros to Ukraine as part of the large-scale Ukraine Support Loan program. Contrary to previous statements, these funds will be used to support the state budget, rather than directly for the production of Ukrainian drones. This was announced by European Commissioner for Enlargement Marta Kos, according to "Komersant Ukrainian"
The disbursement is scheduled for June 25—the opening day of the Conference on Ukraine’s Recovery in Gdańsk, Poland.
The first €3.2 billion will go to Ukraine’s budget
The first tranche of the EU loan will be used as direct budgetary support. The funds are intended to help Ukraine finance critical government expenditures and maintain macrofinancial stability amid a full-scale war.
Specifically, this refers to the ability to finance the following in a timely manner:
- social benefits;
- pensions and salaries for public sector employees;
- health care;
- education;
- other non-military needs of the state.
External budget financing allows Ukraine to allocate most of its own revenue to defense and security.
Why the money wasn’t allocated to drone production
It was previously reported that part of the first aid package could be used to purchase or manufacture drones in Ukraine.
However, according to Euractiv, the European Union faced technical difficulties regarding the monitoring and documentation of how funds were used for defense production.
As a result, it was decided to structure the first payment as budgetary support. This mechanism is clearer from a financial control perspective and allows funds to be transferred to Ukraine more quickly.
The change in the purpose of the first tranche does not mean that the EU has abandoned funding for Ukrainian drones or other defense needs. The defense component of the loan program remains in effect, but the corresponding payments may be made separately once the control mechanisms have been agreed upon.
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What Is Known About the €90 Billion EU Loan
The European Union finally approved the €90 billion Ukraine Support Loan on April 23, 2026.
The program is scheduled for 2026–2027. It is intended to cover a significant portion of Ukraine’s budgetary and military needs.
The indicative structure of the loan provides for:
- approximately 60 billion euros for the development of the defense industry and the procurement of military equipment;
- approximately 30 billion euros for budgetary and macro-financial support.
Ukraine is expected to receive 45 billion euros in 2026 and another 45 billion euros in 2027.
How the European Union Will Finance the Loan
The EU will raise funds on international capital markets backed by guarantees from its budget. The funds raised will be transferred to Ukraine in the form of a long-term loan.
Under the approved model, Ukraine is to repay the loan only after receiving reparations from Russia.
At the same time, the financing is contingent on Ukraine’s fulfillment of a number of conditions. These relate to the rule of law, the fight against corruption, effective budget management, increasing domestic revenues, and economic transparency.
In the event of non-compliance or the cancellation of the agreed-upon reforms, individual payments may be temporarily suspended.
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