Ukraine to receive EU funds before start of Ukraine Facility, first tranche expected in March
The EU support program for Ukraine worth 50 billion euros provides for a transitional financing mechanism that will allow Ukraine to receive support for the state budget even before the full launch of the Ukraine Facility, according to the Ministry of Economy.
Currently, the Cabinet of Ministers is working with European partners to sign a memorandum in March.
The plan provides for the implementation of structural reforms in the public sector, the conduct of several economic reforms aimed at developing the business climate and entrepreneurship, as well as steps to develop priority sectors that can ensure rapid economic growth.
The implementation of the plan will contribute to Ukraine's European integration and further sustainable economic development.
Budget support under the EU's Ukraine Facility will be provided quarterly based on the fulfillment of criteria set out in the plan regarding the implementation of planned reforms.
Minister of Economy Yuliia Svyrydenko expects the EU to finally approve the Ukraine Facility program in April.
To start the program, the Cabinet of Ministers together with the European Commission must prepare a list of reforms that Ukraine will implement during the operation of this financial instrument, the Ministry of Finance reported.
Implementation of the said plan is a prerequisite for Ukraine to receive preferential credit and grant funds for financing budget expenditures of 39 billion euros.
"We expect to receive the first tranche under the Ukraine Facility of 4.5 billion euros already in March," said Minister of Finance Sergii Marchenko.
The last tranche from the European Union within the framework of the previous 18 billion euro macro-financial assistance program was received by Ukraine on December 21, 2023.
In 2023, the European Union became the largest donor of direct budget support, with its funds providing more than 45% of the country's need for external financing.
The Ukraine Plan will include 15 key areas of reform, including areas that fall under the direct competence of the Ministry of Finance:
→ management of public finances,
→ anti-money laundering,
→ financial markets.
According to the approved regulation, Ukraine needs to revise the Plan, taking into account the following conditions:
→ strengthen cybersecurity and resilience to disinformation and external interference;
→ strengthen measures to promote gender equality and expand the rights and opportunities of women and girls;
→ increase the availability of social assistance for vulnerable groups of the population, including veterans and internally displaced persons (IDPs);
→ counter environmental crimes, including damage caused by the war, and ensure compliance with the principle of "Do no significant harm" concerning climate and environmental goals in war and post-war scenarios;
→ strengthen cross-border cooperation with neighboring countries in the areas of trade, environmental protection, and combating crime;
→ direct 20% of grant funds under the first component of the program (1.05 billion euros) to the needs of the regions for recovery and modernization.
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