EU loan for Ukraine: the first tranche will not be spent on drones
This has been reported by Euractiv, citing three EU officials.
Initially, the European Commission and the European External Action Service stated that the first tranche for Ukraine would amount to €5.9 billion and would be used to purchase drones, including those with components manufactured outside the EU or Ukraine.
Now, according to Euractiv, the first tranche is set to amount to €3.2 billion. This money will be directed not towards defence procurement, but towards supporting the state budget.
The payment is expected to be made during the Ukraine Recovery Conference in Gdańsk, Poland.
Why the funds for drones were removed from the first payment
Two sources speaking to Euractiv attributed the change to technical issues. The European Union must ensure proper oversight of how Ukraine spends the funds.
At the same time, the publication’s sources claim that the European Commission may announce a second payment in the coming days, this time specifically for Ukraine’s defence needs.
According to Euractiv, separate aid packages are being prepared for ammunition, air defence and drones.
How the EU loan for Ukraine works
The total loan amount is €90 billion. It is planned to be provided to Ukraine in 2026–2027.
Of this amount, €30 billion is earmarked for macro-financial assistance, i.e. budgetary support. A further €60 billion is to be allocated to Ukraine’s defence needs.
To receive defence funding, Kyiv submits an assessment of its needs to the European Commission. Initially, European-made weapons are to be prioritised for procurement, but Ukraine will be able to purchase armaments from outside the EU under certain exceptions.
The first tranche will help Ukraine cover part of its budgetary expenditure. This funding is intended to ensure the stable functioning of the state: social benefits, public sector wages and other mandatory expenditure.
For the front line, this means that the expected funding for drones will not be included in the very first payment. However, according to Euractiv, defence funding has not been removed from the programme but has been deferred to subsequent decisions.
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