The Council of Finance Ministers of the European Union member states (Ecofin) approved macro-level financial support to Ukraine in the amount of €1 billion, following a meeting in Brussels on Tuesday.
According to the announcement issued on the subject, the support will be available in the form of a long-term loan on favorable terms and will be paid in one installment.
Its availability period is one year, and a prerequisite for the funding is that Ukraine respects effective democratic mechanisms. Before disbursing the aid, the EU must conclude a memorandum of understanding with the Ukrainian authorities, which covers, among other things, increased transparency and reporting regarding the use of funds.
The financial council also announced that, given Ukraine’s extraordinary situation, the EU budget will exceptionally cover the interest costs of macro-level financial support in the form of a loan, which will limit the impact on the country’s budgetary sustainability.
In this way, the EU will further reduce the financial burden on Ukraine and contribute to improving the sustainability of the Ukrainian public debt.
The EU will ensure that it provides the longest possible period for Ukraine to return to growth, rebuild the Ukrainian economy in line with the country’s European aspirations, and maximize the chances of full repayment, according to the council’s joint statement.
Together with the €1.2 billion of emergency macro-level financial support disbursed at the beginning of the year, the amount of funding provided by the EU to Ukraine since the beginning of the war on Feb. 24 is now €2.2 billion. The financial aid approved on Tuesday complements other EU aid provided to Ukraine in the humanitarian, development, customs, and defense fields.