European Commission, Press release, Brussels, 20 May 2014:
Today, the European Commission, on behalf
of the EU, disbursed a first loan tranche of €100 million to Ukraine.
It was made available from the EU Macro-Financial Assistance (MFA)
programme for Ukraine, which is worth €1.61 billion in total.
A further €500 million is expected to follow in the coming weeks, once
the necessary legal procedures in Ukraine have been finalised, notably
the ratification of the Memorandum of Understanding and of the Loan
Agreement by the Ukrainian Parliament, the Verkhovna Rada.
In conjunction
with this loan disbursement, Commission Vice-President Siim Kallas is
visiting Kiev today for a series of meetings with the Ukrainian
authorities, including the Prime Minister, Deputy Prime Minister and
Finance Minister. Discussions are due to focus on the MFA programme and
related economic reforms.
The objective of the MFA programme is
to assist Ukraine economically and financially in the current critical
stage of its development. It is part of the package to support Ukraine
announced by the European Commission on 5 March and endorsed by the
European Council on 6 March.
Vice-President Siim Kallas said:
"The European Union is fully committed to helping Ukraine address its
major economic challenges. This first disbursement marks an important
step towards turning that commitment into reality. This assistance,
which will soon be followed by a further €500 million, provides
much-needed support to Ukraine's efforts to cover its external financing
needs."
The EU's MFA will complement the
resources made available by the International Monetary Fund (IMF) and
other donors in the context of the stabilisation and reform programme
recently prepared by the Ukrainian authorities with the help of the IMF.
The assistance aims to reduce the economy’s short-term balance of
payments and fiscal vulnerabilities.
Beyond today's €100 million
disbursement and the €500 million disbursement currently being prepared,
subsequent payments will be conditional on the implementation of
specific economic policy actions. These are outlined in two Memoranda of
Understanding – which were signed in 2013 and 2014 respectively – as well as in the Stand-By Arrangement approved by the IMF Executive
Board on 30 April. The MFA, besides supporting Ukraine in its immediate
external financing needs, also aims to underpin economic reforms which
have been demanded by the Ukrainian people themselves. The
conditionality linked to this programme focuses
on public finance management and anti-corruption, trade and taxation,
the energy sector (including provisions for increased social subsidies
for the most vulnerable households) and financial sector reforms.
Background
Macro-Financial Assistance is an
exceptional EU crisis-response instrument available to the EU's
neighbouring partner countries experiencing severe balance of payments
problems. It is complementary to the assistance provided by the IMF. MFA
loans are financed through EU borrowings on capital markets. The funds
are then on-lent with similar financial terms to the beneficiary
countries.
The funding for the €100 million
tranche disbursed today was raised on the financial markets on 13 May by
the European Commission on behalf of the European Union.
[europa.eu]
20/5/14
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