MICHEL MARTIN, HOST:
The European Union has approved a massive 90 billion euro loan for Ukraine, or about $105 billion. Ukraine was about to run out of money without it. The money had been held up for months by the leaders of Hungary and Slovakia, who have opposed EU assistance to Kyiv. Reporter Teri Schultz joins us from Brussels. Good morning, Teri.
TERI SCHULTZ: Good morning, Michel.
MARTIN: So what broke the deadlock on Wednesday?
SCHULTZ: Well, Hungary and Slovakia made their approval of this loan contingent on the resumption of oil deliveries from Russia via a pipeline that runs through Ukraine, which had been damaged by Russian attacks in January. And the Ukrainian government didn't exactly rush to fix the pipeline, since it was seen as Russia harming its own financial interests. However, when these two governments, which are the only two EU countries still dependent on Russia oil imports, linked the issue to the loan, President Zelenskyy was ultimately forced to repair it to get the loan package through. This is a huge relief not just for Ukraine but also for EU officials, who were aware that Ukraine's financial reserves run out in a couple of months. Here's EU Commissioner for Enlargement Marta Kos as news broke that the deal would go through.
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MARTA KOS: These days are good days for - good news for the EU-Ukrainian relations, and I'm very happy about this.
SCHULTZ: What many in the EU are not happy about is how such significant decisions can be held up by one or two countries. And this has reignited conversations about scrapping the need for unanimity.
MARTIN: I think people might remember that the outgoing Hungarian prime minister, Viktor Orban, had a long history of holding up EU initiatives, especially those that help Ukraine and hurt Russia. So now that he is on his way out of office, are blocks like this going to happen less often?
SCHULTZ: That's certainly the hope - that the defeat of Viktor Orban is welcomed by EU officials, especially after his foreign minister admitted sharing details from inside EU meetings with Russian Foreign Minister Sergey Lavrov.. This loan to Ukraine became a particularly bitter dispute with Budapest because it was agreed to in December, including by Hungary and Slovakia, which, along with the Czech Republic, had been given opt-outs. They don't even have to contribute. But Orban withdrew his support in January anyway due to this pipeline outage.
MARTIN: So how will this $105 billion be raised, and how will Ukraine pay it back?
SCHULTZ: Yeah. The European Commission, the EU's executive arm, will borrow the money itself on capital markets and then lend it to Ukraine interest-free. They'll get half this year and half next year. It's not enough to cover all the government's expenses, but about two-thirds. EU foreign policy chief Kaja Kallas underscored the significance of this support.
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KAJA KALLAS: It's also a sign that Russia cannot outlast Ukraine. This is extremely important at this moment.
SCHULTZ: And Ukraine will only have to pay back the loan if and when Moscow pays Kyiv reparations for the enormous damage it's caused in more than four years of war.
MARTIN: And what's the latest on EU sanctions against Russia?
SCHULTZ: Well, this 20th package of sanctions has been held up for the same reason as the loan - Hungary's objections. It bans travel to the EU and freezes the assets of an additional group of more than a hundred individuals linked to Russia's war in Ukraine. The package also targets Russia's shadow fleet, blacklisting dozens of aging tankers used to circumvent sanctions on Russian oil. And this is all the more important as President Trump has decided to allow Russia to sell some oil in an exemption from the ban - something that, of course, greatly bothers the Europeans and Ukrainians, as it puts more money in the Kremlin's war chest.
MARTIN: That's Teri Schultz in Brussels. Teri, thank you.
SCHULTZ: You're welcome.
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