The European Union is poised to approve a €90 billion ($106bn) loan for Kyiv, following a protracted dispute concerning the disrupted operations of a war-damaged pipeline that transports Russian oil through Ukraine to Europe.
EU diplomats in Brussels granted preliminary approval for the loan on Wednesday, a decision that coincided with the recommencement of Russian oil deliveries via the Druzhba pipeline to Hungary and Slovakia.
Hungary and Slovakia, the two EU nations that had previously accused Ukraine of delaying repairs, anticipate receiving their initial shipments by “tomorrow at the latest,” as stated by Hungarian oil group MOL. MOL confirmed on Wednesday that Kyiv had verified the oil flow.
Slovakia’s Economy Minister, Denisa Sakova, announced on Facebook that the first deliveries were expected in the early hours of Thursday.
This development, foreshadowed on Tuesday by Ukrainian President Volodymyr Zelenskyy – who attributed the pipeline’s damage to Russian attacks in late January – enabled Hungary to finally withdraw its long-standing veto on the EU loan. The bloc’s 27 member states are now expected to formally endorse the loan by Thursday.
More Sanctions Against Russia on the Way
The EU had agreed to the loan last year to ensure Ukraine’s financial liquidity through 2026 and 2027. However, it had been blocked by outgoing Hungarian Prime Minister Viktor Orban, who has maintained cordial relations with Russia since its 2022 invasion of Ukraine, and the Slovak government.
Ukraine’s prospects for receiving the loan had already improved following Orban’s defeat in Hungary’s parliamentary election on April 12. Peter Magyar, the leader of the victorious party, has declared he will no longer obstruct EU funds for Kyiv, although he is not expected to formally assume power until next month.
Resolution of this deadlock is anticipated to allow Brussels to commence loan disbursements promptly, offering a crucial financial lifeline to Ukraine over four years into its costly resistance against Moscow’s full-scale invasion, especially as Washington scales back its support and lessens pressure on the Kremlin.
Slovak Prime Minister Robert Fico, known for his frequent disagreements with Kyiv and Brussels, remarked on Wednesday that he “would not be surprised if the €90 billion loan were unblocked and then oil supplies were cut off again.”
In conjunction with the loan, EU member states are also considering approving a new round of sanctions against Russia, which had similarly been held up by both Hungary and Slovakia due to the pipeline dispute.
This new package of economic penalties against Moscow, the 20th imposed by the EU since the war began in 2022, targets Russia’s energy, banking, and trade sectors.
The Druzhba pipeline, whose name means “friendship” in Russian, has a capacity of 1.2 million to 1.4 million barrels of oil per day, with potential for expansion to up to 2 million barrels daily.