EU now considering ‘tougher’ conditions for €90 billion loan to Ukraine

The proposal involves introducing value-added tax (VAT) for sole proprietors whose annual income exceeds 4 million hryvnias ($105,787).

The International Monetary Fund has already called for this measure — it was one of four key requirements for Ukraine to receive a new $8.1 billion credit program. However, the decision on VAT has faced a lack of support in Ukraine’s parliament.

Ukrainian Prime Minister Yulia Svyrydenko stated that the IMF showed “understanding” regarding the sensitivity of this issue for Ukrainians, and the government is looking for alternative ways to fill the state budget for 2027.

According to Bloomberg, the European Commission has now also raised the VAT issue. The new requirement could affect €8.4 billion ($9.8 billion) in macro-financial assistance — part of the larger €90 billion loan package for Ukraine.

Approval of the €90 billion loan had been stalled for months, largely due to opposition from Hungary. The process was unblocked following a change of government in that country.

Ukraine’s Ministry of Finance reported that the country is expected to receive €45 billion ($53 billion) each in 2026 and 2027. The first funds are anticipated as early as May or June of this year.

In 2026, €16.7 billion ($19.5 billion) will be allocated for social budget support and €28.3 billion ($33.1 billion) for defense needs.

The budget support will be provided as follows: €8.35 billion ($9.8 billion) in the form of macro-financial assistance and €8.35 billion through the Ukraine Facility.

Overall, approximately €30 billion ($35 billion) of the total amount over the two years will go toward budget support through existing financial assistance instruments, while the remaining €60 billion ($70 billion) will be directed toward military assistance for Ukraine.