First of all, thank you for your invitation to this exchange of views.
I would like to set the context for our work.
By bravely defending their homeland, Ukraine has protected the entire European continent from Russian aggression.
Throughout this time, we have demonstrated our solidarity with and support for Ukraine.
In total, EU support to Ukraine since the beginning of Russia's war of aggression amounts to €193.3 billion, making us by far Ukraine's largest international donor.
We must continue to stand by Ukraine until a just and lasting peace is achieved which guarantees long-term security for both Ukraine and Europe.
In this context, in December, EU leaders decided to provide a limited recourse loan to Ukraine, funded by EU borrowing and based on enhanced cooperation.
Earlier this month, the European Commission followed up with a package of legislative proposals.
The proposed €90 billion Ukraine Support Loan is a limited recourse loan.
It would be financed by EU borrowing on the markets.
To achieve this, and ensure the EU budget covers the loan's interest, we have proposed an amendment to the MFF regulation.
The budgetary participation is based on enhanced cooperation.
It excludes Czechia, Hungary and Slovakia, but provides an option for those Member States to join in the future, if they so wish.
Ukraine will only repay the loan if it receives reparations from Russia for the destruction its war of aggression has caused.
The proposal also makes it clear that the Union reserves its right to use the cash balances from immobilised Russian assets held in the EU to repay the Ukraine Support Loan.
Out of the total €90 billion, an indicative split is proposed for€60 billion to cover Ukraine's defence needs, including the procurement of defence equipment, and €30 billion for budget support.
We expect the €90 billion loan to cover two thirds of Ukraine's current financing needs in 2026 and 2027.
But we need to be realistic and acknowledge that the financing needs are evolving on a constant basis.
We are seeing Russia increasingly target Ukraine's energy infrastructure, leaving Ukrainian people freezing this winter.
To address this, we propose a novelty in the Ukraine Support Loan, which has to be agile.
It will provide support based on a yearly financing strategy which Ukraine will have to submit to the Commission for its assessment.
Based on the identified financing gap, the Council will then decide and approve the amounts to be made available for that year.
Now, turning to the implementation of the support.
For defence needs, the loan would allow Ukraine to make massive investments in the reconstruction of the Ukrainian Defence Technological and Industrial Base and to procure the weapons it needs to defend itself.
This also represents an investment in the EU's future defence needs.
It takes into account Ukraine's future within the EU and the integration of its industry into the European one.
Reflecting the industrial focus of this support, a careful balance on eligible products has been struck.
Priority is given to defence equipment manufactured in Ukraine first, and then in Europe or EEA EFTA Member States.
This is in full alignment with the agreement on the SAFE instrument.
It will facilitate a rapid roll out of the support by allowing Ukraine to leverage the existing work that Member States have done to implement SAFE.
And also countries that have reached an agreement with the EU to participate in SAFE can also be added as eligible partners.
At present, this applies only to Canada.
However, additional third countries would be added should they reach agreement on SAFE.
However, there is some flexibility built into our proposal.
We have proposed a cascade system to allow deviations if no eligible product is available in Ukraine, Europe or EEA EFTA Member States.
The same applies if there is a much-needed product that can be delivered to Ukraine in a significantly shorter timeframe from elsewhere.
Now moving to budgetary support.
This assistance can flow through two instruments, macro-financial assistance and the Ukraine Facility.
Both instruments, have a successful track record and are highly complementary.
Macro-financial assistance provides rapid budget support whilst supporting the implementation of crucial reforms.
The Ukraine Facility provides support for the adoption of reforms relevant for Ukraine's future EU accession.
Talking about conditionality.
The European Commission takes the fight against corruption extremely seriously.
Both Macro Financial Assistance and the Ukraine Facility provide for strong conditionality.
In the case of macro-financial assistance, the conditionality set out in the Memorandum of Understanding to be agreed with Ukraine would also include measures addressing corruption.
In addition, the legislation foresees a no-roll back clause.
This means that all measures against corruption implemented as part of any existing or previous EU or IMF programme would need to be maintained.
If this is not the case, the Commission can stop the disbursement of funds.
Commissioner Kos can give more details on the Ukraine Facility, including progress of reforms under this instrument, proposed amendments, and in this context the next steps in the accession process.
Finally, specifically for defence support, we propose that Ukraine would use a single bank account to manage expenditure.
The European Commission would be given monitoring rights over this account.
All of these safeguards are designed to send a clear message: We will not tolerate corruption or the misuse of funds andthe financial interests of the Union must and will be protected.
Finally, we are committed to ensuring that the European Parliament plays a strong role.
We have therefore proposed to have the same exceptional involvement of the European Parliament for the Ukraine Support Loan as it has had for the Recovery and Resilience Facility.
Specifically, in addition to transparency around decisions and documentation, we propose a "Ukraine Support Loan dialogue".
This provides for the Commission being invited to discuss the implementation of the Ukraine Support Loan before the European Parliament.
I will stop here in my introductory comments and look forward to your questions and comments.
Actually, one question has already come from the chairman of the Budget Committee, on this question of the MFF.
The current state of discussions is that we would try to seek to cover the interest costs under the current MFF, within the MFF ceiling, and adjusting the contributions so that it concerns again 24 Member States.
Should this not be possible, an additional dedicated instrument would be created where 24 Member States would contribute to this funding.
This is the current state of play.
But it is worth noting that as regards the current MFF, we are discussing roughly €1 billion in funding necessary for 2027.
