Despite Hungary blocking the aid package, the EU has agreed to allocate €18B to Ukraine.

The proposal was approved on December 10 and will be presented to the European Parliament for possible approval next week. The package provides for a structural decision on financial support for Ukraine in 2023. The loans will have a 10-year grace period, and EU member states will cover the bulk of the interest costs with external earmarked revenues. The EC’s initial proposal required that the aid package receive unanimous approval from all 27 EU countries. However, Budapest blocked the package in protest over billions of euros in aid for Hungary being frozen. Therefore, it is assumed that the loan guarantees – if Hungary adheres to its veto – will not be covered by the EU budget, as planned initially, but will be assumed by individual EU states. Thus, a unanimous decision was not needed.