European Commission green-lights EUR 500 mln in financial aid for Ukraine

09:40, 11 June 2020
Economy
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The funds will be used to finance state budget expenditures / REUTERS

The European Commission has green-lighted EUR 500 million in the second tranche of the fourth Macro-Financial Assistance (MFA) for Ukraine after the International Monetary Fund (IMF) approved the first disbursement under a new cooperation program with the Ukrainian authorities.

"The European Commission has provided a EUR 500 million resource to Ukraine within the framework of the 4th Macro-Financial Assistance," Ukrainian Prime Minister Denys Shmyhal said on Twitter on June 10. "Grateful to the EU for the positive assessment of the reform process in Ukraine. The received funding will enable strengthening [of] our economy amid the global crisis."

"Successful cooperation with the IMF has translated into an approving response from European partners on the allocation of the next tranche under the program," Shmyhal said on Telegram on the same day.

"Ukraine has fulfilled all the conditions for implementing reforms, which clearly strengthened its status as a responsible state. The funds to be received will be channeled into the national budget to cover spending on handling COVID-19 consequences," he added.

Read alsoUkraine-IMF new cooperation program provides for no raise in retirement age – PM Shmyhal

The Ukrainian Finance Ministry's press service, in turn, said that the tranche is a loan at 0.125% per annum with a maturity date of June 10, 2035.

"The funds will be used to finance state budget expenditures, help reduce external financial pressure on Ukraine, and improve the country's balance of payments," the ministry said on June 10. "Considering the state budget needs to finance immediate areas to counter the spread of COVID-19, receiving these funds will contribute to maintaining financial stability in Ukraine."

As UNIAN reported earlier, the IMF Executive Board on June 9 approved an 18-month Stand-By Arrangement (SBA) for Ukraine, with access equivalent to SDR 3.6 billion (about US$5 billion, or 179% of quota).

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