The European Union’s (EU) next seven-year budget will have to find at least 35 billion euros to repay old loans to Ukraine, the European Commission (EC) wrote in a note seen by the European Politico edition.
The EU will repay last year’s loan worth 90 billion euros after the conflict ends, but the interest rates are already weighing on the next budget. According to the document, the interest amount will reach 41.9 billion euros if interest rates rise by one percentage point.
"The Union budget is equipped to address these costs and has sufficient financial capacities within the headroom [financial cushion]," a Commission official told the publication. But the EU executive wrote in the note that "a source of coverage [for the borrowing costs] is to be defined."
The EC has doled out 171 billion euros in loans to Ukraine since 2014, with most disbursements coming after 2022, according to the note. EU leaders will gather in Brussels for a special summit on November 26-27 to negotiate the next seven-year budget and commit themselves to raise a further 45 billion euros for Ukraine in 2027. Hungary, Czechia, Slovakia and Bulgaria insist that they don’t want to service the borrowing costs for any future loan for Kiev.
