European Commission paid out EUR 600 million to Ukraine under a loan on favorable terms

The European Commission has disbursed EUR 600 million to Ukraine as macro-financial assistance to help cover part of its humanitarian and defense financing needs, the Commission said.

Europe did not hesitate to support Ukraine in the face of ruthless military aggression by Russia. Since the beginning of this invasion, the EU has provided EUR 4.1 billion to help Ukraine and its citizens. This includes EUR 1.2 billion in emergency macro-financial assistance - and today we paid 600 million euros as the second tranche of this program. The EU will continue to provide financial support: this week we announced a new exceptional macro-financial assistance of up to EUR 9 billion in loans and started work on a financial plan for Ukraine's long-term reconstruction," said Executive Vice-President for the Economy, serving the people of Valdis Dombrovskis.

The first installment of EUR 600 million of support was disbursed in two installments in March this year.

These funds are provided to Ukraine in the form of long-term loans on very favorable terms. They contribute to the financing of a significant part of the country's financial gap, estimated by the International Financial Institutions at around USD 15 billion in the second quarter of 2022.

This amount is expected to strengthen Ukraine's macroeconomic stability and support the continuity of the state's functioning, it also announced

The disbursement is made following an assessment of the authorities' progress in implementing structural policy measures agreed in the Memorandum of Understanding.

The Commission noted that the authorities had taken steps to implement the agreed conditions. However, the circumstances of war constitute a case of force majeure which hinders the effective completion of actions within the framework of structural policy.

In response to Ukraine's urgent financing needs and due to the fact that the conditions cannot be met at this stage due to force majeure, the Commission decided to proceed with the emergency payment of the second installment.

MFA operations are intended to serve as the EU's unique crisis response instrument. They are available to EU neighboring countries that are facing serious balance of payments problems.

Since the beginning of the Russian aggression, the EU has mobilized around € 4.1 billion to support Ukraine's overall economic, social and financial resilience in the form of macro-financial assistance, budget support, emergency aid, crisis response and humanitarian aid.

The Commission plans to propose to provide Ukraine with additional MFA in loans of up to € 9 billion in 2022, complemented by support from other bilateral and multilateral international partners, including the G7, it said.

Source: European Commission and ISBnews