The European Commission proposed a new €1 billion macrofinancial assistance (MFA) operation on Friday 1 July, to help Ukraine meet its financial commitments.
This is the first tranche of the exceptional MFA package of up to €9 billion announced in its 18 May communication (see EUROPE 12955/2).
The proposal is part of the European Union’s extraordinary efforts, alongside the international community, to help Ukraine meet its immediate financial needs following the war started by Russia.
This support will complement the assistance already provided by the EU, including an emergency loan of €1.2 billion provided under previous macrofinancial assistance and disbursed in the first half of the year (see EUROPE 12914/4).
In total, the two components of the programme would bring the total assistance to Ukraine since the beginning of the war to €2.2 billion and could reach €10 billion once the entire exceptional assistance package is operational.
According to the proposal, the funds from the new MFA will be made available to Ukraine in the form of long-term loans on favourable terms. The EU budget will cover the interest costs of these loans. As with all previous loans, the Commission will borrow funds on the international capital markets and transfer the proceeds to Ukraine on the same terms. This loan will be guaranteed up to 70% of its value by amounts set aside from the EU budget.
Once the European Parliament and the EU Council have approved the proposal and the corresponding Memorandum of Understanding and Loan Agreement have been signed with the Ukrainian authorities, the Commission will swiftly make the sum of €1 billion available to Ukraine. (Original version in French by Lionel Changeur)