By Francesco Guarascio

BRUSSELS (Reuters). Officials announced that the European Commission will propose a new package for financial aid to Ukraine on Wednesday. This includes new loans to Kyiv in order to supply immediate liquidity as well as commitments to the country’s long-term reconstruction financing.

While the size of this short-term financial aid is yet to be determined, officials who were familiar with these discussions said that it should roughly provide financial support for Ukraine for approximately two months. This was mainly through loans.

Unofficial third party stated that money would be sourced from the EU budget, EU governments and other sources. He dismissed earlier talk of funds being raised through the issue of bond-backed joint bonds.

According to the International Monetary Fund, Ukraine required $5 billion per month (or more) for three months in order to make up the financial gap caused by Russia’s invasion.

Kristalina Georgieva (the chief of the Fund) has asked for support in grants and not loans.

G7 country contributions will play a role in determining the EU’s level of support. In the second half of the week, a meeting of finance ministers of Group of Seven countries is planned. It will take place just as the Commission plans to present its proposals.

The spokesperson of the Commission was unable to comment on this new package.

EU countries will be required to approve the plan of the Commission, although they may try to amend it.

There are many options for how governments can support Ukraine. Many prefer loans, despite IMF views and Ukraine’s inability to pay them back. EU diplomats stated that Germany is just one of many EU nations to support grant applications.

Officials said that the package might consist of a mixture of loans and grants. This money could be used for salaries, pensions, and hospital costs.

This new package will be added to the EU’s emergency loans to Kyiv of 1.2 billion Euros that were agreed by the EU in January. Half of these have already been paid, and the rest are expected to be paid soon, according to a spokesperson for the Commission.

Officials said that Wednesday’s announcement by the Commission would also reflect its support for long-term Ukraine reconstruction. They set out guidelines to guide what will be an enormous financial undertaking of trillions of euro.