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Add to Preferred SourcesThe European Commission has signed a Memorandum of Understanding with Ukraine in Kyiv for Macro-Financial Assistance (MFA) of up to €1 billion in the form of medium- and long-term loans.
With this assistance, the EU will continue to support economic stabilisation in the country, including through structural and governance reforms.
Valdis Dombrovskis, Commission Vice-President responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, signed the Memorandum of Understanding on behalf of the European Union.
He said: “Europe strongly supports Ukraine on its path of economic recovery and reform. The new programme of EU macro-financial assistance will help Ukraine reduce its economic vulnerabilities and enhance stability. At the same time, by implementing important reforms related to the new MFA operation, especially in the area of the fight against corruption, Ukraine needs to deliver on the expectations of its citizens and send a strong signal to its international partners and investors.”
The proposed new Macro-Financial Assistance complements three previous MFA programmes, through which the EU has supported Ukraine with a total of €2.8 billion since the onset of the crisis in 2014, and a programme of the International Monetary Fund (IMF).
The funds for the new assistance programme will be disbursed in two installments of up to €500 million. Each disbursement is conditional on the implementation of specific policy measures agreed between Ukraine and the EU in the Memorandum of Understanding. The agreed policy programme covers, in particular, the fight against corruption, public finance management, governance of state-owned enterprises and banks as well as key social policies. The programme is consistent with the reform path agreed between the EU and Ukraine in the context of the Association Agreement.
As it is always the case with macro-financial assistance, disbursements will also be dependent on the fulfillment of the political preconditions, which require Ukraine to continue respecting effective democratic mechanisms, including a multi-party parliamentary system, and the rule of law and guaranteeing the respect for human rights. Finally, disbursements will be contingent on progress with Ukraine’s programme with the International Monetary Fund (IMF).
The next step in the implementation of the MFA programme is the ratification of the Memorandum of Understanding by the Parliament of Ukraine.
Original source: European Commission
Published on 14 September 2018