The European Commission has approved the provision of a loan to Ukraine in the amount of 500 million euros as part of its fourth program of macro-financial assistance to Kiev and is preparing further assistance to fight the coronavirus. Thus, according to the message of the European Commission, the European Union has provided Ukraine with macro-financial assistance totaling 3.8 billion euros from 2014, and this is the largest amount of such assistance that the EU has provided to any individual partner country. At the same time, the EU drew attention to the fact that, in addition, they are also preparing to provide Ukraine with further urgent assistance to combat the consequences of the coronavirus pandemic.
“Ukraine remains among the priorities on the European agenda. We are continuing her political, financial and technical support, especially in this time of crisis, in order to support reforms in Ukraine in order to create a more sustainable economy. Under the fourth EU macro-financial assistance program, Ukraine has achieved the necessary indicators for reforms, and we are preparing to provide 500 million euros.
And to help our neighbors cope with the consequences of the pandemic, we are providing Ukraine with further urgent macro-financial assistance in the amount of 1.2 billion euros, ”said Valdis Dombrovskis, Executive Vice President for Economic Affairs of the European Commission, who is also responsible for macro-financial assistance to Ukraine. And European Commissioner for Economic Affairs Paolo Gentiloni added: “This latest € 500 million loan is yet another proof of our determination to actively support Ukraine and its people in these difficult times. We will also provide Ukraine with further emergency assistance as part of a large support package during the pandemic crisis that covers ten neighboring countries.
The crisis knows no borders – and European solidarity does not stop at the borders of the European Union. ” The provision of the current second and final tranche of macro-financial assistance became possible after Ukraine fulfilled the twelve requirements agreed with the EU. These include anti-corruption and anti-money laundering measures, public financial management, banking, energy, health and social policy.
In addition, the EU noted, Ukraine is now completing a new stand-by agreement with the International Monetary Fund and has also fulfilled the related requirements. Funds under the macro-financial assistance program are provided as a long-term loan at a low interest rate. The first tranche of the existing program in the amount of 500 million euros was provided to Ukraine in December 2018 after its authorities met the necessary requirements.
In addition, the EU will provide Ukraine with another package of macro-financial assistance worth 1.2 billion euros, which aims to limit the negative economic consequences of the coronavirus pandemic. The European Commission is ready to provide the first tranche of this package to Ukraine immediately after the conclusion of a memorandum of understanding with Kiev. It will spell out the conditions that Ukraine undertakes to fulfill in order to receive the second tranche of this assistance.
EU macro-financial assistance programs are intended for neighboring countries as an emergency crisis response tool in case these countries run into problems with the balance of payments, and are complementary to the assistance provided by the IMF. The current fourth macro-financial assistance program, totaling up to 1 billion euros, was approved by the EU for Ukraine at its request in 2018. Before that, Ukraine received loans under the same programs in the amount of 2.8 billion euros for the period from 2014 to 2017: 1.6 billion euros for the first two programs in 2014-2015 and 1.2 billion euros for the third program in 2015 -2017 years.
In addition to macro-financial assistance, the EU supports Ukraine through a number of other instruments, such as technical assistance, humanitarian aid, budget support and financial instruments to support investments in infrastructure and small and medium-sized enterprises.