MNI: Pressure Mounts To Disburse Ukraine Aid - EU Sources

EU member states are still searching for a solution to the months-long impasse on funding the exceptional Macro-Financial Assistance programme for Ukraine, but sources say political pressure is mounting for a deal to be agreed quickly.

The bulk of the EUR9 billion exceptional MFA announced in May has been held up by German objections to any further use of joint borrowing by the EU, with only EUR1 billion disbursed to date.

“There is strong backing for the idea that we need to move swiftly to support Ukraine,” an EU source told MNI, adding that member states acknowledge that disbursement of the funds was now a matter of “urgency”.

BERLIN BARRIER

Another source underscored that German opposition to joint borrowing remained implacable.

“For Germany, it's crucial and a matter of principle. They moved once, last year on the Macron-Merkel deal (NextGenerationEU), and regard it as an exception. If they move a second time, it becomes the rule. And that they want to avoid. Therefore, the Commission has to find other ways and sources,” a further source following the discussions said.

Asked whether a rearrangement of EU budget lines and/or funding programmes would be required, the source replied, “rearrangements within the EU budget are not uncommon.”

While there have been no signs of an imminent breakthrough in recent days, sources speculate that a solution may well be found once member states re-engage in early September.