UKR/ EU-UKRAINE: COMMISSION PROPOSES FURTHER €1.8 BILLION IN MACRO-FINANCIAL ASSISTANCE

The EU is ready to further assist Ukraine, which has been hit hard by a deep recession, and
 where the conflict in the East of the country has had a heavy toll on the economy. Today the
 European Commission proposed new macro-financial assistance (MFA) to Ukraine of up to
 €1.8 billion in medium-term loans.
 
 The new MFA programme, which is to be approved by the European Parliament and the
 Council of Ministers of the EU, is intended to assist Ukraine economically and financially
 with the critical challenges the country is facing, such as a weak balance of payments and
 fiscal situation. The intention is also to help the new reform-orientated government strengthen
 the country and deal with economic and political challenges. The macro-financial assistance
 proposed today will be linked to certain reform actions.
 
Announcing the decision, European Commission President Jean-Claude Juncker said Europe stood united behind Ukraine and the reform agenda of the new government. “The European Union has provided unprecedented financial support and today's proposal proves that we are ready to continue providing that support… As always, solidarity goes hand in hand with commitment to reform, which is urgently needed in Ukraine. We want to help the Ukrainian government to put its reform agenda into practice and trigger real change for the country and its people."
 
Once the MFA decision has been adopted, a prerequisite for disbursement will be the successful continuation of Ukraine's current IMF programme and the implementation of economic and financial policies in particular that the Commission – on behalf of the EU – and the government of Ukraine will agree on in a Memorandum of Understanding.
 
The policies that the Commission considers important include further fiscal consolidation, continuation of the comprehensive reforms in the energy and banking sectors, as well as improving overall macroeconomic management. It will also be important to strengthen economic governance, transparency and pursue judicial reforms and the fight against corruption in order to improve conditions for business activity and sustainable growth.
 
Subject to the adoption of today’s Commission proposal by the European Parliament and the Council, the proposed new €1.8 billion programme can be implemented in the course of 2015, and in early 2016. It would be the third MFA programme for Ukraine since 2010. In the course of 2014 alone, the Commission disbursed €1.36 billion in support of Ukraine under existing programmes. The disbursement of the final tranche of €250 million under these programmes could be expected by the spring of 2015, subject to successful implementation by Ukraine of agreed policy measures and a continued satisfactory track record with the IMF programme...(link)