09:56 12.10.2023

EU plans to allocate EUR 4.5 bln to Ukraine by late 2023, counts on support of other donors

3 min read
EU plans to allocate EUR 4.5 bln to Ukraine by late 2023, counts on support of other donors

The European Union has become Ukraine's largest donor in 2023, having already allocated EUR 13.5 billion as part of the macro-financial assistance instrument and expecting to pay another EUR 4.5 billion by the end of the year, European Commissioner for Economic Affairs Paolo Gentiloni has said.

"Overall, there is very good progress, and I am optimistic about the prospects of Ukraine fulfilling all conditions by the end of the year for 2024 and beyond," he said on Wednesday at the 4th Ministerial Roundtable Discussion for Support to Ukraine at the IMF-World Bank meeting in Marrakech.

According to him, the EU and other international partners should be proud of the fact that they contributed to covering the financing gap for Ukraine both last year and this year, and thanks to this solidarity, Ukraine's economy is today in better shape than many expected.

"We count on the support from all international partners. We also must align conditionality for support between the international donors and the international financial institutions as much as possible to ensure that they are consistent," the European Commissioner added, emphasizing that financing remains a key factor.

He pointed out that Ukraine had demonstrated the ability to continue to carry out important economic reforms, recalling that the current terms of the EU financial assistance include, among other things, judicial reform of Ukraine, improved regulation of economic activity and an improvement in the bankruptcy regime.

"The European Commission's proposal for $50 billion for the next four years will allow us to help considerably in addressing Ukraine's financing needs," Gentiloni said.

He clarified that as part of this Ukraine Facility package, Ukraine is preparing a plan, a vision of growth based on reforms and investments, in addition to international financial support.

"Ukraine's EU candidate status has also provided a powerful reform impetus, despite the ongoing war. We will continue to stand by Ukraine as long as it takes," the European Commissioner emphasized.

Last year, the main donor to Ukraine was the United States, which allocated $11.98 billion versus $7.96 billion from the EU and called on their European colleagues to be more active. This year, the U.S. has provided Ukraine with $10.9 billion versus $14.66 billion from the EU, and Ukraine's expected $3.3 billion from Washington before the end of the year is in doubt due to the crisis in Congress.

At the roundtable discussion, U.S. Treasury Secretary Janet Yellen emphasized Ukraine's continued support.

"We have provided robust economic support to Ukraine, and the United States will support Ukraine, alongside our allies, for as long as it takes," she said, also noting the need to increase support for countries around the world suffering from devastating food security impacts from the Russian-led war and its recent blocking of the grain corridor.

The U.S. Treasury Secretary called on Ukraine to continue to fight corruption and strengthen accountability and good governance, as stated by President Volodymyr Zelenskyy.

She emphasized that in response to Russia's chosen war, the historic sanctions coalition will continue to limit Russia's access to technological equipment and its financing, which includes establishing price limits for oil and petroleum products, while maintaining stability in global oil markets.