EU to extend preferential trade regime for Ukraine, may make second MFA tranche late March
The European Union (EU) is extending for another year trade protection measures for Ukrainian exports to the EU, known as autonomous trade measures.
"As a sign of solidarity with Ukraine, we have proposed renewing the suspension of import duties, quotas and trade defence measures on Ukrainian exports to the EU for another year. And we are working on deepening Ukraine's integration into the EU single market," European Commission Executive Vice-President Valdis Dombrovskis said on Tuesday at a meeting of the EU Economic and Financial Affairs Council (ECOFIN).
In addition, it is planned to send the second tranche of the Macro-Financial Assistance Plus to Kyiv at the end of March.
"Regarding the EU's emergency financial support for Ukraine, the second disbursement under the Macro-Financial Assistance Plus instrument – EUR 1.5 billion – is due to be made later this month," Dombrovskis said, adding that this will bring the EU's budgetary support paid to Ukraine to EUR 4.5 billion in the first quarter of this year.
According to him, at the ECOFIN meeting, he informed about the state of play with Ukraine's reform implementation for the second disbursement. The European Commission is "at the final stages of assessing the conditions for making a decision," Dombrovskis said.
In April 2022, the European Commission proposed to suspend the collection of import duties on all Ukrainian exports to the European Union for one year.
Last December, the Council of the EU approved a decision on the Macro-Financial Assistance Plus of EUR 18 billion to Ukraine for 2023. The loan was granted with a 10-year grace period. In January, Kyiv received the first tranche – EUR 3 billion. Subsequent disbursements are made monthly starting from March EUR 1.5 billion each.
The European Commission believes that with the help of these funds Ukraine will be able to continue paying salaries, pensions, maintaining the functioning of basic public institutions, including hospitals, schools and housing for migrants. In addition, EU assistance should allow the country to rebuild infrastructure and maintain macroeconomic resilience.
