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EUR 1.2 billion Macro-Financial Assistance Agreement inked

Ukraine and the EU have signed a Memorandum and Loan Agreement on disbursement to our country an exclusive macro-financial assistance in the amount of EUR 1.2 billion from the European Union.

The relevant documents were signed on July 23 during the working visit of the Prime Minister of Ukraine Denys Shmyhal to Brussels. Minister of Finance Serhii Marchenko and Governor of the National Bank Kyrylo Shevchenko are taking part in the working trip together with the Head of Government.

The macro-financial assistance program is intended for 12 months and will be disbursed in two tranches of EUR 600 million each. It is assumed that the allocation of the first tranche is possible immediately after the entry into force of the Memorandum of Understanding and the Loan Agreement.

Receipt of the second tranche will be possible after the Ukrainian side implements a number of special conditions and after the European Commission conducts an appropriate assessment of the fulfilled obligations.

“Today’s signing of the Memorandum of Understanding and the Credit Agreement, under which Ukraine will receive a 1.2 billion euros support, gives us confidence in the economic stability of the country and the continuation of reforms that will ensure the well-being of our Ukrainian citizens. The new macro-financial assistance program is quite ambitious but realistic, and its successful implementation will be a joint victory for both Ukraine and the EU,” said Prime Minister Denys Shmyhal.

The provisions of the draft Memorandum agreed with the European Commission provide for eight obligations to be fulfilled by the Ukrainian side to receive the second part of macro-financial assistance, which include the following:

1) increasing the transparency and efficiency of medical procurement;

2) introduction of tax and customs administrations reform and implementation of tax and customs reform plans;

3) strengthening the independence, integrity, effective functioning of the judiciary;

4) strengthening the transparency and efficiency of the public administration system and the independence and efficiency of the work of anti-corruption bodies and the prosecutor’s office;

5) extending powers of private bailiffs; recovery of assets in state-owned banks;

6) adoption in the first reading of the draft law on the establishment of a new agency (body) for the investigation of serious economic and financial crimes;

7) introduction of the regulatory framework for corporate governance for state-owned enterprises (in accordance with the OECD guidelines);

 8) improving the functioning of the gas market.

It is worth mention that on May 20, 2020, the Council of the European Union decided to disburse new macro-financial assistance to Ukraine and nine other EU neighboring countries. The credit is intended to address the effects of the crisis caused by the COVID-19 pandemic and to improve macro-financial stability.

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