EU countries clear the way for €35 billion loan for Ukraine

EU ambassadors in Brussels cleared the way for €35 billion ($39 billion) in loans for Ukraine secured by windfall profits from frozen Russian assets on Wednesday.

The Council of the European Union - the EU body representing the 27 member states - publicized the decision.

European Commission President Ursula von der Leyen announced the loan package on a visit to Kiev in September. "Russia's relentless attacks mean further support is necessary," von der Leyen said.

The commission president's plan for an EU loan for Ukraine- without the United States' involvement - first required the approval of a qualified majority of EU countries.

The commission's plan was to use a qualified majority for the Ukraine loan to avoid a veto by Hungary. The loan still has to be approved by the European Parliament.

The €35-billion package is the European Union's share of a $50 billion loan for Ukraine announced by the seven major Western industrialized nations (G7) in June.

EU member states Germany, Italy, and France are G7 nations. The remaining amount of the G7 loan for Ukraine is to be raised by the other G7 countries, Canada, Japan, and Britain.

Around €210 billion in Russian state assets held by financial institutions in the bloc are currently frozen under EU sanctions, according to commission figures.

These assets are expected to generate around €2.5 to €3 billion in interest annually, the commission said. The EU sanctions freezing these Russian assets are renewed every six months.

According to EU rules, the freezing of funds must be decided unanimously.

The United States, the remaining G7 country, only wanted to participate in the G7 loan if the Russian assets were frozen for 36 months, than the current six-month period.

Hungary is opposed to this and has used a veto to block the extension for longer than the six-month period.