Brussels (Brussels Morning) – The European Council adopted an implementing decision giving a favourable assessment to the ‘Ukraine Plan’, which sets out the purposes of the government of Ukraine regarding the recovery, reconstruction and modernisation of the nation, and the reforms it intends to undertake as part of its EU accession process in the next four years.
According to the European Council Ukraine meets the precondition for support under the Ukraine Facility (up to €50 billion), and now regular payments can begin to flow.
What conditions must Ukraine meet to receive support under the Ukraine Facility?
Payments to Ukraine will be expended by the EU subject to the implementation of the agreed reform and investments in the condition of the qualitative and quantitative steps set out in the annexe of the Council implementing the decision. The reforms and investments expected have a significant potential to improve growth, sustain macroeconomic stability, enhance the fiscal situation and support Ukraine’s further integration with EU.
The Council’s latest decision provides further details on the agreements and timetable for its implementation, including the envisaged timetable for the disbursement of the support and its payment schedule. The conclusive qualitative and quantitative steps are to be completed by the end of 2027.
What democratic and rule of law criteria must Ukraine uphold for financial support?
In addition, financial support under the ‘Ukraine Plan’ will be driven available under the precondition that Ukraine persists to uphold and respect effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and to ensure respect for human rights. Financial support is also conditional on strengthening the rule of law, supporting the independence of the judiciary, supporting public administration reform, and combating corruption – in particular high-level corruption – and money laundering.
This decision will allow the Commission to spend up to €1.89 billion in pre-financing until regular disbursements tied to the undertaking of reform and investment indicators under the Ukraine Plan start.
What is the scope and duration of the Ukraine Facility’s financial support?
The Ukraine Facility, which comes into force on 1 March 2024, envisions up to €50 billion of stable financing, in donations and loans, to support Ukraine’s recovery, reconstruction, and modernisation for the period 2024 to 2027. Of this, up to €32 billion of the Ukraine Facility is indicatively committed to supporting reforms and investments set out in the ‘Ukraine Plan’, whereby distributions will be conditioned to the delivery of specified indicators. Since its entry into force, the Ukraine Facility already paid €6 billion by way of bridge financing, after the fulfilment of agreed policy conditions.
In the ‘Ukraine Plan’ presented on 20 March 2024, Ukraine outlined its concept for reconstruction, modernisation and the reforms it plans to undertake as part of its EU accession process. The plan highlights structural reforms and investments in the sectors with the largest expansion potential. It addresses progress in public administration, emphasising good governance, dedication to the rule of law and the fight against corruption and fraud.
What did the Commission’s appraisal reveal about the ‘Ukraine Plan’?
In its appraisal dated 15 April 2024, the Commission affirmed that the ‘Ukraine Plan’ meets the criteria specified by the Ukraine Facility Regulation. According to the Commission, the ‘Ukraine Plan’ comprises a targeted and well-balanced response to the purposes of the Ukraine Facility, handles the challenges of Ukraine’s accession path, and responds to reconstruction and modernisation needs.
In its positive assessment of the plan, the Commission proposed an in-depth and extensive analysis covering the effect of the war of aggression of Russia on Ukraine, the macroeconomic perspective for the country, and challenges connected to Ukraine’s recovery, reconstruction and modernisation, including the requirement for external funding, increased labour force, government’s ability to implement reforms as well as transparency and accountability at all stages.
