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Bloomberg: European bureaucracy blocks 1.5 billion euro loan to Ukraine

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July 8,2022 516
Bloomberg: European bureaucracy blocks 1.5 billion euro loan to Ukraine

The executive arm of the European Union blocked a 1.5 billion euro loan for Ukraine, as officials say caution outweighs the country’s urgent needs. According to Bloomberg, the European Commission’s budget unit blocked the loan due to concerns about its financial reliability.

The European Commission guarantees European Investment Bank loans for operations outside the EU, with provisions usually amounting to 9% of total funding. But in this case, the commission wants provisions at 70% of the total, as it did with a previous proposal of 1 billion euros for Ukraine, officials said. The commission is making the demand in case the country cannot repay the funds to the markets.

The European Commission is seeking alternative solutions, which rely on EU member states or on the EIB to share part of the additional risks associated with these loans, an official added.

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