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Parliament agreed to a Commission proposal to provide Kyiv with macro-financial assistance, an emergency resource for EU neighborhood countries struggling to pay their bills. It will be paid out in two installments, as reported by European Parliament.
Half of the 1.2 billion euro loan can be disbursed immediately to foster stability in Ukraine if certain preconditions are met.
The loan serves as “swift support in a situation of acute crisis and to strengthen the resilience of the country”, the proposal states. In order for the money to be disbursed, the country must show progress in implementing a macroeconomic programme set up by the International Monetary Fund (IMF). MEPs emphasize that “effective democratic mechanisms, including a multi-party parliamentary system, and the rule of law, and guarantees respect for human rights” are also preconditions for disbursement.
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Ukraine’s external financing has dried up due to Russia’s military threat and the worsening economic situation in the wake of the COVID-19 pandemic.
Since 2014, the EU and European financial institutions have allocated over €17 billion in grants and loans to the country, according to the Commission. €5 billion of this came through five MFA programmes to support the implementation of broad reform. The IMF identified a $2.5 billion (€2.2 billion) gap in Ukraine’s financing needs for 2022.
Earlier, US Secretary of State Antony Blinken announced that the U.S. is offering Ukraine a loan guarantee of $1 billion to help strengthen its economy in the midst of “Russia’s destabilizing behavior.”
Canada will offer a loan of up to $393 million to support Ukraine and USD 6,1 mln worth of lethal equipment and ammunition, Prime Minister Justin Trudeau said on February 14.
