The European Commission has proposed to establish a € 50 billion dedicated financing instrument for Ukraine to provide coherent, predictable as well as flexible support
The European Commission has proposed to establish a dedicated financing instrument worth € 50 billion that will provide coherent, predictable as well as flexible support to Ukraine for the period 2024-2027.
The Facility underscores the European Union’s (E.U.’s) steadfast commitment to supporting Ukraine in the face of Russia’s ongoing war of aggression and on its path towards E.U. membership.
Taking it to Twitter, the President of the European Commission – Ursula von der Leyen tweeted,
The @EU_Commission presents an update on the progress made by Ukraine on reforms.
— Ursula von der Leyen (@vonderleyen) June 21, 2023
The goal is in sight. We'll work together to the finish line.
We want to match 🇺🇦 reforms with 🇪🇺 investments.
Our proposed Facility for Ukraine would ensure support until 2027 with up to €50 bn
The new Ukraine Facility will support Ukraine’s efforts to sustain macro-financial stability, promote recovery, and modernise the country whilst implementing key reforms on its E.U. accession track. It will support the transition towards a green, digital and inclusive economy that is progressively aligned with E.U. rules and standards.
The Facility is organised around 3 pillars. The first pillar comprises of financial support to the State in the form of grants and loans. This will ensure stable and predictable funding, supporting the sustainability of Ukraine’s finances while providing a solid framework for protecting the E.U. budget. To access this support, the Government of Ukraine will need to prepare a Plan for the country’s recovery, reconstruction and modernisation and detail the reforms and investments it intends to undertake as part of its E.U. accession process.
The second pillar is a specific Ukraine Investment Framework designed to attract and mobilise public and private investments for Ukraine’s recovery and reconstruction in support of the Plan’s implementation. It will complement all existing instruments supporting Ukraine, such as blending and guarantees, with the possibility of scaling up when conditions allow it.
The third pillar comprises of technical assistance and other supporting measures, including mobilisation of expertise on reforms, support to municipalities, civil society, and other forms of bilateral assistance normally available for pre-accession countries under the Instrument for Pre-Accession (IPA), also supporting the objectives of the Ukraine Plan. Under this pillar, it will also be possible to support other initiatives aimed at responding to the Russian aggression against Ukraine, including enforcing international law in relation to crimes committed by Russia on the territory of Ukraine. This pillar will also cover interest rate subsidies for the cost of loans.
The Facility and its implementation will be equipped with a robust framework for transparency, audit and control to protect E.U. financial interests. The European Parliament and the European Council will examine the proposal. Once adopted, Ukraine will be invited to submit its Plan, laying out the reforms and investments it intends to undertake. Following its assessment of the Plan, the European Commission will make a proposal to the European Council to adopt the Plan and set the conditions to be fulfilled by Ukraine to access support under the Facility.
