The Council of Ministers decided to urgently provide additional macro-financial assistance (MFA) of EUR 1 billion to Ukraine.
Together with the €1.2bn emergency MFA disbursed earlier this year, total EU macroeconomic financial support to Ukraine since the start of the war now stands at €2.2bn and is expected to increase further in the coming months . This financial assistance is complementary to other EU support to Ukraine in the fields of humanitarian aid, development, customs and defence.
The MFA approved today is intended to address Ukraine’s immediate and most urgent financing needs, and to ensure the ability of the Ukrainian state to continue to perform its most critical functions. It takes the form of a long-term loan with particularly favorable terms. It will have an availability period of one year and will be disbursed as a single installment, which may be subdivided into one or more tranches. This new MFA operation is part of an extraordinary international effort by bilateral donors and international financial institutions to support Ukraine at this critical juncture.
The tranche and assistance will be released once a memorandum of understanding is agreed with the Ukrainian authorities. This will include enhanced transparency and reporting on the use of funds and will set out reporting requirements to which such MFA will be linked.
Given the extremely difficult situation facing Ukraine, the EU budget will exceptionally cover the interest costs arising from the MFA, in the form of a loan, thus limiting the impact on the country’s fiscal sustainability. In this way, the EU will provide additional financial relief to Ukraine and help improve the sustainability of the country’s public debt. The Commission will arrange for a loan with a long maturity to allow as much time as possible for Ukraine to return to growth, rebuild its economy in line with its European ambitions and maximize the chances of full repayment.
SOURCE: AMPE
Source: Capital
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