The Commission has disbursed the first €4.5 billion of support under the EU’s new Ukraine Facility. Through this exceptional bridge financing, the EU is providing much-needed liquidity to Ukraine, to help finance the functioning of the state, such as public wages, pensions, and the provision of basic public services, so that the country can continue focusing efforts on winning the war.
Ukraine has also submitted its official Ukraine Plan, which paves the way for regular payments under the Facility conditioned to the reform and investment agenda of Ukraine for the next four years. As a next step, the Commission will swiftly assess the Ukraine Plan and submit a proposal for a Council implementing the decision to approve it as conditions to access regular payments.
Following her meeting with Ukrainian Primer minister Denys Shmyhal, Commission President Ursula von der Leyen said: “Is a good day for Ukraine, as more EU funds are flowing to meet urgent needs. The Commission has just paid to Ukraine a first tranche of 4.5 billion Euro from the Facility. This payment, in the form of bridge financing, is crucial to help Ukraine maintain the functioning of the State in this difficult moment. Ukraine has also delivered the Ukraine Plan. This success is all the more impressive, since it is only 19 days ago that the Ukraine Facility entered into force. The plan maps out how Ukraine can get back to rapid growth and start to recover the losses that the war has caused. With it, Ukraine has laid a solid foundation for the EU’s support, right up until the end of 2027”.
The Ukraine Facility of up to €50 billion will provide stable and sustainable financing to support Ukraine’s recovery, reconstruction, and modernisation, including key reforms necessary on its EU accession track for the period of 2024-2027. This amount is composed of up to €17 billion in grants and up to €33 billion in loans.
On the ‘exceptional bridge financing’
As provided for in the regulation establishing the Ukraine Facility, exceptional support to Ukraine to support the macro-financial stability of the country for a limited period can be provided by the Commission in case the Ukraine Plan is not yet adopted or the Framework Agreement between the Commission and Ukraine is not yet signed. This is subject to the fulfilment of policy conditions as well as reporting requirements to ensure the transparent and efficient use of the funds. Policy conditions are linked to important reforms in the fight against corruption, money laundering and sound financial management, among others.
If the Commission assesses in April the positive fulfilment of these policy conditions and reporting requirements, the Commission will be able to disburse an additional €1.5 billion to Ukraine in bridge financing.
On the Ukraine Plan
As the next step, the Commission will assess the Ukraine Plan, which focuses on structural reforms, investments and measures to promote convergence with the EU, and shall submit a proposal for a Council implementing decision to assess it. The Commission will review whether the Plan responds to the objectives of the Ukraine Facility to support the recovery, restoration, reconstruction, and modernisation needs caused by Russia’s war of aggression and if it is consistent in addressing relevant challenges in the context of Ukraine’s accession path. Finally, the Commission will also assess if Ukraine’s proposed measures can ensure an adequate level of protection of the financial interests of the Union.
The Council will have one month to assess the Plan. A Council Implementing Decision will detail the indicators of reforms and investments that Ukraine must fulfil for the disbursement of financial support for each quarter of the year for the next four-year period.
Once the Ukraine plan, the Framework Agreement between the European Commission and Ukraine, as well as the financing and loan agreements are in place, Ukraine could benefit from the disbursement of a pre-financing of €1.9 billion. This would then be followed by regular quarterly payments if the agreed indicators for reforms and investments have been met.
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