News & Analysis

EU Offers Ukraine New Macro-Finance Assistance

The European Parliament Committee on Foreign Affairs has approved a draft resolution granting Ukraine a new programme of macro-financial assistance up to 1 billion euros. The European Commission has been an active supporter of Ukraine for some time, disbursing a total of 2.8 billion euros in macro-financial assistance (MFA), the highest amount ever made available by the EU to a third partner. 

The objective of the proposed MFA is to help Ukraine cover part of its additional external financing needs in 2018-2019, reducing the economy’s short-term balance-of-payment and fiscal vulnerabilities. In addition, the EU assistance would provide incentives to step up Ukraine’s reform efforts by agreeing with the Ukrainian authorities a Memorandum of Understanding setting out an appropriate package of measures supporting economic adjustment and structural and anti-corruption reforms. 

To make this happen, the European parliament wants to see the fight against corruption stepped up, ensuring the independence of judges and the creation of a Central Election Commission from representatives of all political forces in the Verkhovna Rada, the Ukrainian parliament. 

“We must avoid the dangers of making the mistakes that were made before. The very concept of justice is important here,” said Ukrainian Prime Minister Volodymyr Groysman. “Citizens want it to be made clear: if you steal you will be jailed, if you mistook government finance for your own, you will be jailed. We have to restore hope that we are capable of making decisions enabling us to adjust the rights of all stakeholders and bring wrongdoers to justice.” 

Measures which were not implemented under the previous programme will now need to be fulfilled: an effective verification system has to be established in order to verify asset declarations of public officials; then, considering the new EU regulations on data protection, expert exchanges between Ukraine and the EU should be organised with a view to establishing the necessary steps for Ukraine to implement a verification mechanism; finally, the wood export ban, which is not compatible with refraining from trade-restricting measures, remains in place, and a law repealing it is yet to be considered by the responsible parliamentary committee in Ukraine.