Brussels [Belgium], April 23: EU countries on Wednesday agreed to unlock a €90 billion ($106 billion) loan to Ukraine and impose new sanctions on Russia, after Hungary dropped its months-long opposition.
The funding is intended to cover Ukraine's most urgent economic and military needs and enable the country to continue its defensive struggle against Russia.
In addition, EU ambassadors also agreed to the bloc's 20th package of sanctions on Russia, which aims to put further economic pressure on Moscow.
"The unblocking is the right signal under the current circumstances," Ukrainian President Volodymyr Zelensky wrote on X.
"Russia must end its war. And the incentives for that can arise only when both support for Ukraine and pressure on Russia are sufficient," he said.
"It is important that the European support package becomes operational swiftly," he said.
The new loan for Ukraine had been caught up in a dispute between Kiev and Budapest over halted Russian oil deliveries to Hungary and Slovakia via the Druzhba pipeline that runs through Ukraine.
On Tuesday, Zelensky said that the pipeline had been repaired and can resume operations.
Wednesday's decision is to be formalized through approvals in writing from each of the bloc's 27 capitals, which is scheduled to be completed on Thursday, the Cypriot EU Presidency said.
Should no oil arrive in the European Union by then, Budapest or Bratislava could theoretically halt the approval process.
Key pipeline reopens
In a promising sign, Hungarian sources said the Druzhba pipeline resumed operations on Wednesday.
"According to the information available to us, oil flow through the Druzhba pipeline resumed today at 11:35 am [0935 GMT] from Belarus towards Ukraine," the Hungarian Minister for EU Affairs, Janos Boka, wrote on his Facebook page.
Russian crude oil is expected to arrive in Hungary either later on Wednesday or by Thursday morning at the latest, Boka said. Another branch of the Druzhba pipeline also transports oil to Slovakia.
Outgoing Hungarian Prime Minister Viktor Orban had accused Ukraine of blocking the resumption of Russian oil supplies via the Druzhba pipeline for political reasons ahead of Hungary's parliamentary elections on April 12, which he lost decisively.
Kiev rejected the allegation, saying the pipeline required repairs following Russian airstrikes in January.
The pipeline runs from Russia through Belarus and Ukraine to Hungary and Slovakia. The loan will be financed through jointly issued EU bonds on capital markets and backed by available headroom in the bloc's long-term budget.
The European Commission hopes to disburse the first tranche of €45 billion by the end of June, with a further €45 billion to follow next year.
Ukraine will only be required to repay the loan if Russia makes compensation payments for the damage caused once the war has ended.
An agreement also provides for Russian assets frozen in the EU to be used for repayment should Moscow fail to pay compensation for war damage.
€60 bn earmarked as military support
From the €90 billion to be made available to Ukraine, one-third is earmarked for budgetary support while two-thirds, or €60 billion, is intended for defence-related expenditure.
The military equipment procured with the funds is to come primarily from Ukraine or the EU.
Ukraine is only to use the money to purchase military equipment in countries outside Europe if the required equipment is either not available at all or not available in a timely manner in either Ukraine or the European market.
This allows funds to be used for systems deemed irreplaceable, such as Patriot air defence system from the United States.
Source: Qatar Tribune