The European Union has given initial approval for Ukraine to use part of a €90 billion loan to pay military salaries. This marks the first time the EU has allowed its financial aid to be directed towards military expenses.
According to Arseniy Pushkarenko, a deputy from Ukraine's "Servant of the People" party, the decision means that salaries for the Armed Forces personnel can now be covered by the newly approved credit funds. Previously, Ukraine used external assistance solely for civilian needs, covering all military costs from its domestic budget.
However, there are conditions attached. Reports indicate that the EU may tighten the loan terms, requiring Kyiv to first increase the VAT rate to 20% for enterprises with annual revenues exceeding €77,400 that operate under a preferential tax system.
Ukraine, meanwhile, is not shying away from making its own demands. Andriy Melnyk, Ukraine's permanent representative to the UN, has called for an increase in EU military support to one percent of the bloc's GDP.
