Brussels (Brussels morning) – The European Commission has allocated an extra €1.5 billion in bridge financing to Ukraine, supporting reforms and macro-financial stability. The disbursement underlines ongoing EU commitment to Ukraine’s recovery.
Under the Ukraine Facility, the European Commission has disbursed the second tranche of exceptional bridge financing to Ukraine, amounting to €1.5 billion. The disbursement pursues the positive review by the Commission of the approved policy conditions connected to reforms in the domains of judiciary, anti-money laundering, public finance management, business environment and agriculture, as well as documenting requirements to ensure the transparent and efficient usefulness of the funds. A general precondition for the approval under the Ukraine Facility is to respect adequate democratic mechanisms.
What is the total EU support to Ukraine since February?
In March, the Union unleashed the first instalment of the exceptional bridge financing, of €4.5 billion. With this payment, the EU has paid €6 billion to Ukraine to sustain the country’s macro-financial stability since the entry into force of the Ukraine Facility on 1 March. Total EU backing to Ukraine and its people since February 2022 now amounts to €98.5 billion.
What did the Commission President say regarding the Funding?
Commission President Ursula von der Leyen expressed: “Ukraine is carrying a heavy burden on its shoulders for all of us. The additional €1.5 billion we disburse today will ensure that Ukraine can continue to keep the State and basic services running for the population, while it fights back the aggressor. We will work closely with the Ukrainian authorities to ensure the implementation of the Ukraine Plan, which I expect the Council to agree on swiftly. This will pave the way for regular and predictable disbursements under the €50 billion Ukraine Facility. Europe remains united and resolute in its support for Ukraine.”
What is the purpose of the new Ukraine Facility?
The new Ukraine Facility, which became operational on 1st March, expects up to €50 billion of stable financing, in donations and loans, to help Ukraine’s recovery, reconstruction, and modernisation for the duration 2024 to 2027. Of this, up to €32 billion of the Ukraine Facility is indicatively committed to support reforms and investments set out in the Ukraine Plan, whereby distributions will be conditioned to the delivery of specified indicators.
How will the funds from the Ukraine Facility be utilized?
Close to €7 billion will be mustered for the Investment Framework to fund investments, and deliver access to finance, while approximately €5 billion is foreseen for technical contribution to support reforms and related support measures.
Finally, €6 billion is dedicated to exceptional bridge financing, which the EU has already disbursed. The Regulation specifying the Ukraine Facility qualifies for the Commission to deliver exceptional bridge financing for up to six months to fund the macro-financial stability of the country. Such bridge financing is anticipated in case the Ukraine Plan has not yet been embraced. The Ukraine Plan is the government of Ukraine’s strategy of reforms and investments that will underpin periodic payments under the Ukraine Facility.
Following the Commission’s upbeat assessment of the Ukraine Plan on 15 April, the Council has one month to verify this assessment. This will pave the route for pre-financing to Ukraine, followed by standard disbursements under the Ukraine Facility upon attainment of the reforms and investments set out in the Ukraine Plan.
