EU tightens Ukraine aid terms

The European Union has finalized a €90 billion loan for Ukraine, and Kyiv is now under fresh pressure to meet the reform conditions attached to outside funding. (consilium.europa.eu) (usnews.com) The Council of the European Union said on April 23 that the package will cover Ukraine’s urgent budgetary needs and defence industrial spending in 2026 and 2027. The bloc said disbursements can begin in the second quarter of 2026. (consilium.europa.eu) Reuters reported on April 28 that one immediate flashpoint is a draft law to impose value-added tax on low-cost parcels from abroad. A source close to the talks said the measure is needed to keep Ukraine’s $8.1 billion International Monetary Fund program on track ahead of a June review. (usnews.com) Ukraine’s finance ministry says parcels worth less than €150 are currently exempt from VAT, and taxing them would raise about 10 billion hryvnias, or roughly $228 million, each year. Reuters said non-commercial parcels worth less than €45 would stay exempt and the tax would not start before 2027. (usnews.com) A March 30 draft law sent by Ukraine’s Cabinet to parliament would shift VAT collection on qualifying low-value imports to online platforms and other electronic intermediaries. KPMG said the proposal covers non-excise consumer goods shipped in consignments worth no more than €150. (kpmg.com) The tax fight sits inside a much larger financing structure. The International Monetary Fund approved a new 48-month Extended Fund Facility for Ukraine on February 26 worth about $8.1 billion, and said it forms part of a $136.5 billion international support package. (imf.org) The EU’s own support already mixes several channels. The European Commission says it has disbursed €43.3 billion in macro-financial assistance since the war began, while the separate Ukraine Facility offers up to €50 billion from 2024 through 2027 with quarterly payments tied to agreed reforms. (commission.europa.eu) (enlargement.ec.europa.eu) The new €90 billion loan has its own conditions. The Council said funding is linked to rule-of-law requirements, including anti-corruption measures, and split it into an indicative €30 billion for macroeconomic support and €60 billion for defence industrial capacity. (consilium.europa.eu) That leaves Kyiv trying to finance a war, preserve domestic support and satisfy lenders at the same time. The next test is whether parliament passes the parcel VAT law before the International Monetary Fund’s June review. (usnews.com)