The European Commission has approved the distribution of €500 million to Ukraine under the EU’s Macro-Financial Assistance programme.
Macro-Financial Assistance, made available to countries neighbouring the EU, is intended to help countries experiencing balance of payments issues, acting complementary to International Monetary Fund assistance as an “exceptional EU crisis response instrument”. It is financed through EU borrowing on capital markets and issued to applicable countries in the for of long term, low interest loans.
The funds made available to Ukraine through the Macro-Financial Assistance programme will help cover the country’s financial needs and be put towards implementing a long term agenda of structural reform. Ukraine has complied with the policy agreements it made with the EU at the time of the last Macro-Financial Assistance distribution, working towards fighting corruption, improving industry transparency, enhancing the predictability of its tax environment and strengthening the governance of state-owned bodies.
Pierre Moscovici, Commissioner in charge of Economic and Financial Affairs, Taxation and Customs, said: “Ukraine has fulfilled the policy commitments agreed with the EU for the release of the first payment under the Macro-Financial Assistance programme. This is an important and encouraging signal that Ukraine continues to deliver on reforms despite the current security environment and the upcoming electoral cycle.”
The Macro-Financial Assistance funding, disbursed to Ukraine on the proviso that it continues to work against corruption, come as tensions between Ukraine and its neighbour Russia heat up. After Russia captured three Ukrainian boats in the Kerch Strait last weekend, Ukraine has implemented martial law and today issued a ban on Russian men between the ages of 16 and 60 from entering the country.
Valdis Dombrovskis, Commission Vice-President responsible for the Euro and Social Dialogue, who is in charge of the Financial Stability, Financial Services and Capital Markets Union, said: “The European Union has shown constant political and financial support to Ukraine. Today’s European Commission decision on disbursement [of Macro-Financial Assistance] comes at a crucial moment when Ukraine and its people face a new aggression from Russia and need to see solidarity from international partners. Such aggressive behaviour is not acceptable in today’s Europe.”