The European Commission will provide up to 1 billion euros to Ukraine in the form of medium- and long-term loans as part of the macro-financial assistance package. Brussels seeks to support economic stabilization in the country including structural and governance reforms and help the country reduce its economic vulnerabilities and thus spur economic recovery and enhance stability. “Ukraine needs to deliver on the expectations of its citizens and send a strong signal to its international partners and investors,” Valdis Dombrovskis, Commission Vice-President responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, explained.
The funds of the new assistance program will be disbursed in two installments and each disbursement is conditional on the implementation of specific policy measures agreed by both sides. The EU-funded program specifically targets fight against corruption, governance of state-run enterprises and banks, key social policies, and public finance management. As is usually the case with EU funding, the financial assistance is also conditional upon political preconditions covering areas such as democratic mechanism, the rule of law and human rights.
Macro-financial assistance (MFA) operations that are part of the EU’s wider engagement with its neighbours are intended as exceptional crisis response tools. They are available to the EU’s neighbouring countries facing balance-of-payments problems. In addition to MFA, Brussels supports Ukraine through several other instruments including budget support, technical assistance and humanitarian aid. Ukraine has benefited from a total 2.8 billion worth of EU MFA loans since the beginning of the crisis in early 2014. This is the highest amount ever made available by the EU to a third partner country.