Josep Borrell – Photo © European Union 2022
(BRUSSELS) – The European Union continued its support to help Ukraine shore up its public finances Wednesday with disbursement of a new EUR 1 billion macro-financial assistance operation for the country.
The additional MFA of EUR 1 billion is part of an extraordinary effort by the EU, alongside the international community, to help Ukraine to address its immediate financial needs following the unprovoked and unjustified aggression by Russia.
It is the first part of the exceptional MFA package of up to 9 billion announced in the Commission’s communication of 18 May 2022 and endorsed by the European Council of 23-24 June 2022. It complements the support already provided by the EU, including a 1.2 billion emergency MFA loan paid out in the first half of the year. Taken together, the two strands of the programme bring the total MFA support to Ukraine since the beginning of the war to 2.2 billion.
“Our support to Ukraine is unwavering,” said the EU’s foreign policy chief Josep Borrell: “We will continue to support the Ukrainian people – politically, financially and with military means – in facing the adversity and challenges caused by Russia’s aggression. Ukraine is defending its sovereignty and right to exist with determination and dignity. The EU is standing by Ukraine in these endeavours and will continue to do so.”
The MFA funds have been made available to Ukraine in the form of long-term loans on favourable terms. The assistance supports Ukraine’s macroeconomic stability and overall resilience in the context of Russia’s military aggression and the ensuing economic challenges.
In a further expression of solidarity, the EU budget will cover the interest costs on this loan. As for all previous MFA loans, the Commission borrows funds on international capital markets and transfers the proceeds on the same terms to Ukraine. This loan to Ukraine is backed for 70% of the value set aside from the EU budget.
This financial assistance comes in addition to unprecedented support provided by the EU to date, notably humanitarian, development and defence assistance, the suspension of all import duties on Ukrainian exports for one year or other solidarity initiatives, e.g. to address transport bottlenecks so that exports, in particular of grains, could be ensured. Since 2014, the EU has provided over EUR 5 billion to Ukraine through five MFA programmes to support the implementation of a broad reform agenda in areas such as the fight against corruption, an independent judicial system, the rule of law, and improving the business climate.
Communication of 18 May 2022 on Ukraine relief and reconstruction
