Verkhovna Rada ratifies Ukraine-EU memo on EUR 1.2 bln in assistance

The Verkhovna Rada, Ukraine's parliament, has ratified a memorandum of understanding between Ukraine and the European Union on Ukraine's receipt of EU macro-financial assistance worth up to EUR 1.2 billion.

Read alsoEuropean Commission's macro-financial assistance not to affect hryvnia rate – PMThe relevant bill (No. 0063) was backed by 248 MPs with the required minimum of 226 votes, an UNIAN correspondent reported on August 25.

The bill was developed to enforce international agreements signed by Ukraine in Brussels on July 23, 2020, to receive EUR 1.2 billion in macro-financial (loan) assistance from the European Union, according to the explanatory note.

"Due to the negative financial and economic consequences over the spread of acute respiratory disease COVID-19, the European Parliament and the Council on May 25, 2020, made a final decision on the possibility of providing 'exclusive' macro-financial (loan) assistance to European Neighborhood Policy countries, in particular Ukraine, to support their efforts to overcome the COVID-19 crisis," the explanatory note said.

It is noted that, based on the terms of borrowing under the previous four EU macro-financial assistance programs, the borrowing rate under the new program for up to 15 years is projected to be acceptable (up to 2% per annum), but its specific size will be known only after the European Commission enters the foreign market of borrowings to obtain funds that will be transferred to Ukraine at the same interest rate.

Memorandum and Loan Agreement

• Ukraine and the European Commission on July 23, 2020, signed a Memorandum and a Loan Agreement during a working visit to Brussels of Ukrainian Prime Minister Denys Shmyhal, Ukrainian Finance Minister Serhiy Marchenko, and newly appointed Governor of the National Bank of Ukraine (NBU) Kyrylo Shevchenko.
• According to Shmyhal, a EUR 1.2 billion disbursement for Ukraine is the largest one provided by the European Commission under a macro-financial assistance (MFA) program that is exceptional in nature and is envisaged for 10 countries to overcome the negative consequences of the pandemic.
• In particular, Ukraine undertook to conduct a competitive selection of candidates for the positions of heads of the State Tax and Customs Services after the quarantine is over and disband the country's State Fiscal Service, according to the memorandum. Ukraine also made a commitment to pass in the first reading a bill establishing a new agency to probe into serious economic and financial crimes.