Ukraine to receive EU MFA of EUR 1.2 bln in two tranches – Ukraine's rep to EU

Ukraine's representative to the EU Mykola Tochytsky has said that the macro-financial assistance (MFA) of the European Commission to Ukraine in the amount of EUR 1.2 billion will be provided in two tranches: first EUR 600 million will be provided at once after the approval of the decision by the European Parliament and the Council of the European Union unconditionally, and the second tranche of EUR 600 million will be provided under conditions, the negotiations on which will take place soon.

Tochytsky gave this information to Interfax-Ukraine in Brussels on Wednesday, commenting on the decision of the European Commission to provide EUR 1.2 billion of MFA to Ukraine, to overcome the economic consequences of the coronavirus (COVID-19) pandemic.

Speaking about what these conditions may be, the representative of Ukraine to the EU said that concrete negotiations on this issue have not yet begun. However, he referred to the already existing practice of such criteria, which previously appeared in other agreements concluded between Kyiv and Brussels regarding the allocation of MFA. In particular, it can be steps in the field of public finance management, anti-corruption, taxation, labor and social security, business conditions, customs and so on.

"In addition to the EU, there is no other union of states that would provide similar assistance not only to their members, but also to other partners. We are grateful to our European partners for extremely timely and substantial support to our economy, business and population," Tochytsky said.

The diplomat drew attention to the fact that, as for the procedure for the provision of this MFA in the amount of EUR 1.2 billion, the decision adopted by the European Commission is "only the beginning", as it should be further approved by the European Parliament and by the Council of the European Union. "Synchronously, negotiations will be held regarding the signing of a memorandum between Ukraine and the EU, which after signing should be ratified by the Verkhovna Rada of Ukraine. That is, this is a lengthy process," he said.

At the same time, Tochytsky said that MFA is provided by the European Union only to those partner states that successfully cooperate with the International Monetary Fund. "This is a general condition. Therefore, the payment of the last, fourth tranche of the MFA IV program, which was approved in September 2018, as well as the second tranche of today's MFA depends on the adoption of the so-called "banking" bill as amended, as agreed with the IMF by the parliament," the representative of Ukraine to the EU said.

In this regard, the Ukrainian diplomat expressed the hope that the fourth tranche of EUR 500 million will be provided in the first half of the year, and EUR 600 million of "emergency" assistance in the second half of the year.

In addition, Tochytsky also recalled that on April 8, the EU decided to provide a package of assistance in the amount of EUR 190 million to Ukraine. "These funds, in particular, will be used to help the population living in areas affected by Russian aggression in the east of the country. EUR 30 million of it is the so-called "technical assistance" to Ukraine's healthcare, not only for the purchase of necessary equipment and materials, but also to improve skills and promote the normative work of the Ministry of Health," he said, disclosing the details.

In addition, according to him, EUR 45 million will be earmarked to the support program for small and medium-sized enterprises and to support existing programs, and will also be issued in the form of cheap loans, including in hryvnia. In addition, this assistance provides for the payment of EUR 10 million as part of a government support program. Also, part of the funds will be channeled to public organizations to support the non-governmental sector.

Tochytsky said that another example of financial support from the EU to Ukraine was that on April 16, the European Commission announced the provision of EUR 13 million of humanitarian aid. "This tranche will be aimed not only at combating COVID-19, but also at other needs, such as, for example, restoring water supply," the diplomat said.