PURPOSE: to extend the mobilisation of a guarantee for financial assistance beyond the ceilings of the Multiannual Financial Framework (MFF) to Ukraine for financial assistance available for the years 2023 and 2024.

LEGISLATIVE ACT: Council Regulation (EU, Euratom) 2022/2496 amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027.

CONTENT: support to Ukraine following the Russian war of aggression is provided on an ad hoc basis for a limited period of time and requires considerable provisioning from the Union budget and Member States' guarantees.

In order to contribute, together with other international partners, to covering Ukraine's urgent financing needs, the EU has established a new instrument ( Macro-Financial Assistance + ). Under this instrument, a significant part of the envisaged financial assistance is to be provided in the form of loans.

Against the background of increased external instability, a structured financing solution for the years 2023 and 2024 is needed to ensure continuity of financial support to Ukraine.

To enable the EU to provide the necessary budgetary resources in a sustainable and rational manner, this Regulation amends Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework (MFF) for the years 2021 to 2027 to provide that where a guarantee is required for financial assistance to Ukraine which is available for the years 2023 and 2024 and authorised in accordance with the Financial Regulation, the necessary amount will be mobilised over and above the ceilings of the MFF .

In principle, the EU budget guarantee will cover short-term financial relief to Ukraine for an amount of up to EUR 18 billion as specified in the Regulation establishing an instrument for providing support to Ukraine for 2023 (macro-financial assistance +). The use of the macro-financial assistance during 2024 will be limited to disbursements in the first quarter of that year.

ENTRY INTO FORCE: 21.12.2022.

The European Parliament adopted by 490 votes to 39, with 23 abstentions, a legislative resolution on the draft Council regulation amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027.

Parliament gave its consent to the draft Council regulation.

Following Russia's war of aggression against Ukraine, the EU is supporting Ukraine through a series of financial measures. This support is provided on an ad hoc basis for a limited period of time and requires considerable provisioning from the EU budget and Member States' guarantees.

Ukraine will need continued assistance to maintain the functioning of the state. Against the background of increased external instability, a structured financing solution for the years 2023 and 2024 needs to be provided to ensure continuity of financial support to Ukraine.

The proposed amendment to Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework (MFF) for the years 2021 to 2027 aims to extend the existing mechanism in the form of an EU budget guarantee to cover the financial assistance that is made available to Ukraine in the years 2023 and 2024.

The amending Regulation provides that where a guarantee is required for financial assistance to Ukraine which is available for the years 2023 and 2024 and authorised in accordance with Article 220(1) of the Financial Regulation, the necessary amount should be mobilised in excess of the ceilings of the MFF.

PURPOSE: to extend the mobilisation of a guarantee for financial assistance beyond the ceilings of the Multiannual Financial Framework (MFF) to Ukraine for financial assistance available for the years 2023 and 2024.

PROPOSED ACT: Council Regulation.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: support to Ukraine following the Russian war of aggression is provided on an ad hoc basis for a limited period of time and requires considerable provisioning from the EU budget and Member States' guarantees.

In order to contribute, together with other international partners, to covering Ukraine's urgent financing needs, the EU has established a new instrument (Macro-Financial Assistance +). Under this instrument, a significant part of the envisaged financial assistance is to be provided in the form of loans.

Against the background of increased external instability, a structured financing solution for the years 2023 and 2024 is needed to ensure continuity of financial support to Ukraine.

To enable the EU to provide the necessary budgetary resources in a sustainable and rational manner, it is necessary to extend the existing mechanism in the form of an EU budget guarantee to cover the financial assistance which is made available to Ukraine in the years 2023 and 2024. This mechanism should make it possible to mobilise up to 100% of the amounts of the financial commitment needed to honour the EU's repayment obligations under the borrowing and lending operations in the event that the Union fails to provide the due payment from Ukraine on time.

It should be possible to mobilise the necessary appropriations in the Union budget over and above the ceilings of the Multiannual Financial Framework (MFF) for the Member States as well as for the financial assistance to Ukraine available for the years 2023 and 2024.

CONTENT: the Council's draft aims to amend Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework (MFF) for the years 2021 to 2027 to provide that where it is necessary to call up a guarantee for financial assistance to Ukraine which is available for the years 2023 and 2024 and authorised in accordance with the Financial Regulation, the necessary amount will be mobilised over and above the MFF ceilings.

EUR 18 billion as set out in the Regulation establishing an instrument for providing EU support to Ukraine (macro-financial assistance +) and the use of macro-financial assistance in 2024 should be limited to disbursements in the first quarter of that year.

PURPOSE: to extend the mobilisation of a guarantee for financial assistance beyond the ceilings of the Multiannual Financial Framework (MFF) to Ukraine for financial assistance available for the years 2023 and 2024.

PROPOSED ACT: Council Regulation.

ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the act only if Parliament has given its consent to the act.

BACKGROUND: following Russia's unprovoked and unjustified invasion of Ukraine, the EU has provided significant support to Ukraine to strengthen resilience and provide humanitarian assistance, military aid and other support. Ukraine will require continued assistance to sustain the functioning of the State.

The macro-financial assistance (MFA) to Ukraine by the Union so far has been generous and effective, but it has been provided on an ad hoc basis, covering a few months at a time, and required significant provisioning from the Union’s budget and national guarantees in each funding round. Amid heightened external instability, it is appropriate to provide for a structured financing solution for the years 2023 and 2024 to ensure continued financial support for Ukraine. It is therefore appropriate to allow the Union to provide the needed budgetary resources in a sustainable and sound manner.

CONTENT: the proposed amendment to Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027 will extend the budgetary coverage currently applied to loans to Member States also to loans to Ukraine available for the years 2023 and 2024 ; this concerns financial assistance in respect of which a decision authorising the release is adopted in those years.

Accordingly, if the Union has to honour repayment obligations from resources of the Union’s budget - in the case a beneficiary state (a Member State or Ukraine for financial assistance available for the years 2023 and 2024) fails to provide the due payment on time - the necessary amounts would be mobilised over and above the MFF ceilings up to the limits of the own resources ceiling.

By extending the mobilisation of a guarantee for financial assistance over and above the MFF ceilings to Ukraine for financial assistance available for the years 2023 and 2024 in addition to financial assistance to EU Member States, the proposal will allow a more efficient use of the budgetary resources under the MFF ceilings. The possibility to mobilise the guarantee over and above the MFF ceilings would offer full coverage of the financial assistance to Ukraine available for the years 2023 and 2024, in accordance with the principle of sound financial management.