Yesterday, Ukraine received 600 million euros from the EU as part the third Macro Financial Assistance (MFA) package which amounts to a total of 1.8 billion euros.
The EU Macro Financial Assistance package is allocated within the framework of more extensive support for Ukraine through bilateral and multilateral partners. The MFA operation in Ukraine has the objective of stabilizing the financial sector, improving the balance of payments and relevant budget issues.This is the third Macro Financial Assistance package which Ukraine has received from the EU. The MFA program is the successful result of implementing all requirements in line with the first and second packages which totaled 1.6 billion euro during 2014-2015. Together with the new program, the EU financing totals 3.41 billion euro and is the biggest financial support provided to a non-member state from the EU during this short time period.
“On behalf of the Ukrainian people we express our deep gratitude to our EU partners for their continuous support during the hard times for our country. We appreciate their faith in our team successfully carrying out the reforms. We will strengthen our efforts and use such further opportunities to benefit the Ukrainian people”, said Minister of Finance Natalie Jaresko.
Ukraine will receive the next tranches of the MFA following further reforms in the financial and energy sectors, as well as improvements in state governance and business climate. In particular, it is expected that the second tranche of 600 million euros will be delivered at the end of 2015 and the third tranche of 600 million euros will be disbursed in the first quarter of 2016.
Key facts about the EU Macro Financial Assistance:
- The third EU Macro Financial Assistance package anticipates the total sum of 1.8 billion euros as mid-term loans;
- EU partner countries which receive MFA have significant problems with balance of payments;
- This tranche of the EU MFA package is associated with the Program for Cooperation, the Extended Fund Facility (EFF), between Ukraine and the IMF. In particular, Ukraine would receive a tranche of 600 million euros only after the ratification of the relevant documents and completion of the first review of the EFF.
- The financial support aims to stabilize the state budget and to serve the debt;
- The European Commission uses the highest credit rating (AAA) and international credit market for receiving money which is transferred to Ukraine at the same interest rate.
- The MFA interest rate of 0.25% allows it to replace present debt and service this up to 8%, meaning current loans will have a lower interest rate.