Posted on May 21, 2022
The European Commission, on behalf of the EU, on Friday disbursed €600 million in Macro-Financial Assistance (MFA) to Ukraine. Following Russia's unprovoked and unjustified invasion, this urgent financial support helps Ukraine address its acute financing gap related to its exceptional humanitarian and defence needs. The first instalment of €600 million from this emergency Macro-Financial Assistance operation was disbursed in two tranches on 11 and 18 March.
These funds are provided to Ukraine in the form of long-term loans on highly favourable terms. They contribute to financing part of the sizable funding gap of the country, estimated by International Financial Institutions at around $15 billion for the second quarter of 2022. This Macro-Financial Assistance is enhancing Ukraine's macroeconomic stability and supporting the continuous operation of state functions at this critical juncture. The disbursement is a tangible demonstration of the EU's unwavering support for Ukraine.
The disbursement follows an assessment of the authorities' progress with implementing the structural policy measures agreed in the Memorandum of Understanding. The Commission has concluded that the authorities, overall, have taken action towards the implementation of the agreed conditionality. However, the current war circumstances constitute an event of force majeure that impedes the effective completion of the structural policy measures. As an exceptional response to the acute financing needs of Ukraine, and since the conditionality cannot be achieved at this stage for reasons of force majeure, the Commission decided to proceed with the disbursement of the second tranche as a matter of urgency.
President Ursula von der Leyen said: “In these extremely difficult times, the EU unwaveringly stands in support of Ukraine and of its courageous people. Today, we disbursed €600 million in emergency Macro-Financial Assistance to address Ukraine's acute financing needs, thereby ensuring it can keep on running essential services and addressing basic daily needs. Today's disbursement is the last tranche of the €1.2 billion financial aid package I announced at the end of January. Going forward, the EU will continue to provide short-term financial support to Ukraine while accompanying it in its long-term reconstruction, in line with the plans announced on Wednesday. Ukraine will get back on its feet as a democratic and prosperous country”.
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