European Commission officially proposes to provide Ukraine with up to €18 billion in macro-financial assistance in 2023

On 9 November, the European Commission proposed an unprecedented support package of up to €18 billion for Ukraine for 2023.

Source: European Pravda

This assistance will be provided in the form of concessional loans, which will be disbursed in regular instalments starting from 2023.

Quote: "This stable, regular and predictable financial assistance – averaging €1.5 billion per month – will help cover a significant part of Ukraine's short-term funding needs for 2023, which the Ukrainian authorities and the International Monetary Fund estimate at €3 to €4 billion per month," the European Commission said.

Details: The support proposed by the EU would need to be matched by similar efforts from other major donors in order to cover all of Ukraine's financing needs for 2023.

As European Pravda noted, thanks to these funds, Ukraine will be able to continue to pay salaries and pensions and maintain essential public services such as hospitals, schools and housing for relocated people. It will also allow Ukraine to ensure macroeconomic stability and restore critical infrastructure destroyed by Russia.

The support should be accompanied by reforms to further enhance the rule of law, good governance, and anti-fraud and anti-corruption measures in Ukraine.

Quote: "Therefore, while taking into account the evolution on the ground, financial support will be framed by policy conditions geared towards strengthening Ukraine's institutions and preparing the ground for a successful reconstruction effort, as well as supporting Ukraine on its European path," the European Commission said.

Details: The Macro-Financial Assistance+ (MFA+) instrument offers high flexibility and very favourable conditions for Ukraine, catering to the country's current situation and ensuring swift action to support the Ukrainian people.

The funds will be provided in the form of highly concessional loans to be repaid over a maximum period of 35 years, starting in 2033. As a sign of solidarity, the EU also proposes to cover Ukraine's interest costs through additional targeted payments by Member States into the EU budget. EU Member States and third countries will also be able to add more funds to this instrument, to be used as grants, if they so wish. The funds will then be channelled through the EU budget, allowing Ukraine to receive the support in a coordinated manner.

To ensure the smooth delivery of the package, the European Commission is putting forward three legislative proposals. Before entering into force, they must be approved by the European Parliament and EU Member States in the Council.

As European Pravda reported, Hungary informed EU finance ministers during a meeting in Brussels that it would not support the necessary amendments to prepare the €18 billion aid package for Ukraine next year.

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