Romania’s government has agreed to contribute up to EUR 50 million to subsidize the interest owed by Ukraine for the repayment of the EUR 18 billion loan from the EU approved for Kiev by the Council and the European Parliament in December of last year, reports Romania Insider.
The EU borrows the money it lends to Ukraine from the international capital markets, and the loan has accrued interest in the year that has passed since.
THis loan of 18 billion euros has made short-term financial assistance available to Ukraine.
„Given Ukraine’s difficult situation, the European Union provides additional support from the member states by covering the interest rate costs. The interest subsidy will be borne by the member states through additional voluntary contributions”, the government’s emergency ordinance says, cited by Profit.ro.
The EUR 50 million will come from Romania’s state budget and will be sent over between 2024-2027, averaging EUR 12.3 million per year.
The national contributions were calculated based on the share of each of the member countries in the total gross national income (GNI) of the Union and were estimated using „prudent assumptions regarding the interest rates for the funds raised”.
The EU legislation approving the EUR 18 billion loan for Ukraine stipulates that „the Union may bear the cost of interest by providing an interest rate subsidy, and may bear the administrative costs related to the contracting and granting of loans, except for costs related to the early repayment of the loan.”
Romania’s participation in this European scheme to finance Ukraine was initially approved by the government as of August 2023 through a memorandum.
The EUR 18 billion EU loan for Ukraine approved at the end of last year has a 10-year period of grace.
