EU to provide Ukraine with $15B aid package, will freeze assets of Ukrainians for fund misuse

The European Union is proposing to provide Ukraine a $15 billion aid package in loans and grants over the coming years, the head of the bloc's executive arm said Wednesday, as it prepared to freeze the financial assets of 18 people held responsible of misusing state funds.

The package will include 1.6 billion euros in loans and 1.4 billion euros in grants from the EU budget and up to 8 billion euros fresh credit from the EU's financial institutions, the European Investment Bank and the European Bank for Reconstruction and Development.  In addition, another 3.5 billion euros could "potentially" come from the bloc's assistance to neighboring countries through 2020, the European Commission said.

The package is "designed to assist a committed, inclusive and reforms oriented Government in rebuilding a stable and prosperous future for Ukraine," Commission President Jose Manuel Barroso said.

The EU's 28 foreign ministers also approved Wednesday the list of people who will have their financial assets in Europe frozen. The identity of those targeted was withheld pending the official publication in the EU's legal journal Thursday, at which point the sanctions will be effective for the coming 12 months.

Officials say releasing the names could give those targeted a last chance to pull their assets out of the 28-nation bloc.

The ministers said the sanctions also contain provisions facilitating the recovery of the frozen funds for Ukraine's new government "once certain conditions are met."

The United States announced a $1 billion aid package in energy subsidies Tuesday. Kiev estimates it needs $35 billion in international rescue loans over the next two years. The International Monetary Fund is expected to play a key role in providing those bailout loans.

The EU package foresees helping to modernize the country's gas transit system and providing technical assistance ranging from judicial reform to assistance in preparing elections, the Commission said. The package also calls for steps to accelerate achieving visa-free travel for Ukrainians to the 28-nation bloc.

That measure, if approved, would go down particularly badly in Moscow, since Russia has sought visa-free travel to Europe for its citizens for years. Suspending discussions on that project are among the punitive measures against Russia over its move against Ukraine's Crimea Peninsula, which are being weighed by EU leaders at an emergency meeting Thursday.

Coincidentally, the headline figure of $15 billion for the EU's assistance package is the same amount that Russia was prepared to grant Ukraine in loans until the government of President Viktor Yanukovich was ousted last month.

Yanukovich took the Russian loans instead of a wide-ranging trade and economic agreement with the EU, which fuelled the protests that eventually led to his ouster.

Barroso insisted that agreement was still on the table, and the EU is prepared to provisionally grant Ukraine the benefits deriving from it before a full ratification.

The timeline over which the EU funds and loans would be disbursed varied from a few hundred million euros this year to multi-billions between now and 2020. But the details were left vague because the situation in Ukraine is still uncertain and negotiations between Kiev and the IMF are ongoing, EU officials said.

Most disbursements will likely hinge on the formation of a new government in Ukraine after the May elections and an agreement on wide-ranging economic reforms with the IMF. The fund will likely insist, among other things, on a currency devaluation and a sharp rise of natural gas prices, which Ukraine subsidizes heavily.

The Associated Press contributed to this report.