EU releases first €3 billion of €18 billion macro-financial support to Ukraine

The European Union on 17 January disbursed the first €3 billion of the €18 billion macro-financial support agreed in December.

With the stable, regular and predictable financial support of up to €18 billion for 2023 under this instrument, Ukraine will be able to keep on paying wages and pensions and maintain essential public services running, such as hospitals, schools, and housing for relocated people. It will also allow Ukraine to ensure macroeconomic stability and restore critical infrastructure destroyed by Russia in its war of aggression, such as energy infrastructure, water systems, transport networks, roads and bridges.

“Helping Ukraine meet its financing needs to face the Russian aggression is both crucial and urgent,” von der Leyen wrote on Twitter. “The Commission is acting with utmost speed and determination.”

The aim of this emergency assistance is to provide short-term financial relief, financing Ukraine’s immediate needs, rehabilitation of critical infrastructure and initial support towards sustainable post-war reconstruction, with a view to supporting Ukraine on its path towards European integration. The loans will have a 10-year grace period.

The funding is accompanied by reforms as well as reporting requirements to ensure the transparent and efficient use of the funds. These are laid out in a Memorandum of Understanding between Ukraine and the Commission, which entered into force on 16 January 2023. The agreed policy conditions are geared towards strengthening Ukraine’s institutions and preparing the ground for a successful reconstruction effort, as well as supporting Ukraine on its European path. The 20 targeted policy conditions, considered to be achievable by Ukraine and the Commission by the end of 2023, concern four policy areas: macro-financial stability, structural reforms and good governance, rule of law and anti-coruption, and energy.

Future payments to Ukraine under the MFA+ instrument of €1.5 billion per month, will continue as of March and will be conditional on satisfactory progress towards implementing the agreed conditionality, as well as continuous compliance with the reporting requirements.

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