The European Commission announced yesterday (21 April) that it had disbursed the last tranche of the Macro-Fiscal Assistance (MFA) for Ukraine worth €250 million. The total aid provided to Ukraine now amounts to a total of €610 million. The MFA aims to help Kiev solve its urgent financing needs and stabilize Ukraine financially while pursuing reform agenda. The program focuses mostly on public finance management, anti-corruption legislation, taxation, trade and the energy and finance sectors. The MFA is widely used in Eastern Europe as a crisis-response instrument available to EU’s neighbouring countries.
Prior to yesterday’s disbursement, Brussels had made two instalments last year: €100 million on 20 May 2014 and €260 million on 12 November 2014 of the first MFA program in the country. The second MFA program of €1 billion was likewise distributed in 2014: €500 million took place on 17 June 2014, and the second tranche was paid on 3 December 2014. Yesterday’s payment had been raised in mid-April through the issue of a €260 million amortising bond with a final maturity of 15 years. Of these funds, €250 million have been provided to Ukraine while the remaining €10 million were used to finance a loan to Georgia. Both loans offer a long maturity at a very low interest rate.
In case of Georgia, the Commission provided the first part of Georgia’s €46 million MFA approved in August 2013. The main objective of this program is to help Georgia strengthen its balance of payments and fiscal position as well as support reform efforts. The Commission focuses mostly on social policy, public finance management, and banking supervision. Moreover, the deal should also help Tbilisi implement regulations in trade and competition policy, which should lead to the implementation of the Georgia-EU Deep and Comprehensive Free Trade Area agreement.