The European Commission has disbursed the first instalment of € 2 billion under the € 5 billion exceptional Macro-Financial Assistance (MFA) operation for Ukraine.
The European Commission has disbursed the first instalment of € 2 billion under the € 5 billion exceptional Macro-Financial Assistance (MFA) operation for Ukraine.
This is part of an MFA package of up to € 9 billion, announced in the European Commission’s May 18, 2022, Communication on Ukraine Relief and Reconstruction. This was endorsed by the European Council on June 23-24, 2022.
It is part of the extraordinary effort by the European Union (E.U.) to help Ukraine address its immediate financial needs following the unprovoked and unjustified invasion by Russia.
Taking it to twitter, the President of European Commission – Ursula von der Leyen tweeted,
Today we are disbursing €2 billion in macro-financial assistance to Ukraine.
— Ursula von der Leyen (@vonderleyen) October 18, 2022
More will follow by the end of the year.
We'll stand by 🇺🇦 for as long as it takes.
We will discuss how to ensure continued support with global partners at the #RebuildUkraine conference. pic.twitter.com/NoOkIFhIO5
The European Commission has already disbursed the first € 1 billion of MFA package on August 1 and 2, 2022. This followed a previous € 1.2 billion emergency MFA loan paid out to Ukraine in the first half of this year. With this latest payment, the total MFA support disbursed to Ukraine has reached € 4.2 billion.
The funds have been provided to Ukraine in the form of highly concessional loans, with longer-term maturities than under regular MFAs and on highly favourable terms. The assistance supports Ukraine’s macroeconomic stability and overall resilience in the context of Russia’s invasion and the ensuing economic challenges.
Besides, the E.U. budget for the first time will cover the interest costs on this loan, at least for the current multiannual financial framework. This € 2 billion loan to Ukraine is being covered for 70% of its value by funds set aside from the E.U. budget (for 9%) and by national guarantees by the Member States (for the remaining 61%).
The payment was disbursed after Ukraine complied with reporting requirements laid out in the Memorandum of Understanding signed with the European Commission. For subsequent payments, Ukraine will have to demonstrate satisfactory progress towards the implementation of policy actions related to economic resilience and agreed with Ukraine and are deemed feasible and relevant in the current situation of Russia’s war against Ukraine.
Going ahead, the disbursement of the subsequent installments under this € 5 billion package will follow swiftly and are planned before the end of the year. In addition, work on the remaining € 3 billion part of the overall exceptional MFA package of up to €9 billion is ongoing, in parallel to work on a more strategic and predictable approach of E.U. financing support for Ukraine in 2023.
