Lithuania Is Strengthening Its Support for Ukraine: It Will Allocate More than EUR 30 Million
Today, the Government approved the allocation of EUR 20 million from the funds borrowed on behalf of the State for participation in the European Union (EU) and international initiatives for assistance to Ukraine and Moldova. A EUR 10 million contribution of these funds will be allocated to the World Bank Group's International Development Association's Crisis Facility Special Programme for the Reconstruction of Ukraine and Moldova, and a EUR 10 million contribution to the EU for Ukraine Fund newly established by the European Investment Bank.
"The international community continues to resolutely mobilize financial support for defending Ukraine. Lithuania has already on many occasions contributed to similar international initiatives supporting Ukraine through the effectively functioning instruments of the European Union and international financial institutions and is among the leading countries in allocating support to Ukraine. So far, the humanitarian, financial and military aid allocated by Lithuania represents 1.4 % of GDP. It is our joint responsibility as Western partners to ensure that Ukraine stands up not only militarily, but also in terms of financial and macroeconomic stability," notes Minister of Finance Gintarė Skaistė.
The Government also approved the draft resolution authorizing the Minister of Finance to sign the agreement between the European Commission (EC) and the Republic of Lithuania on contributions in order to contribute to covering the interest costs of loans granted by the EU to Ukraine.
According to the EU Macro-Financial Assistance Instrument for Ukraine approved at the end of 2022, the EC was granted the authority to allocate loans amounting to up to EUR 18 billion to Ukraine. The EC has already paid EUR 7.5 billion to Ukraine this year. When approving this assistance instrument for Ukraine, it was envisaged that, as an expression of solidarity, the Member States could contribute to covering the interest costs of loans granted to Ukraine. By signing the agreements, the Member States will undertake to transfer the requested contribution amounts to the EC. The expected amount to be paid by Lithuania in 2024-2027 would be up to EUR 10.6 million (the annual contribution would be about EUR 2.64 million).
In order to continue providing financial assistance to Ukraine, the International Development Association (IDA), one of the organizations of the World Bank Group, is developing a new Crisis Facility, which consists of 2 programmes - the Special Programme for the Reconstruction of Ukraine and Moldova and an additional Crisis Management Facility for the poorest countries affected by the crisis. The Special Programme, for which it is planned to allocate a EUR 10 million Lithuania's contribution, would provide input to meeting the financing needs of Ukraine in various areas: rebuilding and reconstruction, budget support, social and economic sectors, etc.
The European Investment Bank (EIB), taking into account the call of the European Council of 15 December 2022 to strengthen its support for meeting the most important infrastructure needs of Ukraine proposed to implement the European Union (EU) initiative for Ukraine, including the establishment of the EU for Ukraine Fund. On 29 March 2023, the EIB Board of Directors approved the initiative and the establishment of the aforementioned Fund. The EU for Ukraine Fund, to which Lithuania will contribute EUR 10 million, will allow the EIB, as the bank of the European Union, to continue to play an important role in Ukraine and to finance urgent and important projects to strengthen infrastructure and economic resilience, until a permanent mechanism for assistance to Ukraine at the level of the European Union is found.
So far, Lithuania has allocated over EUR 950 million of humanitarian, financial and military aid, which represents 1.42 % of gross domestic product (GDP) for 2022.
Last updated: 09-06-2023
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