ZCZC
BCN-15
EU-UKRAINE-ECONOMY-FINANCE
EU to lend Ukraine 1 bn euro in new aid package
KIEV, Sept 15, 2018 (BSS/AFP) – The European Union agreed to lend Ukraine
1 billion euros ($1.17 billion) to encourage the war-torn country’s economic
stabilisation, the European Commission vice-president in charge of the euro
said Friday.
“This programme will address economic vulnerabilities and support economic
stabilisation,” European Commission vice-president Valdis Dombrovskis said
after signing an agreement with Ukraine’s authorities.
According to the deal, the funds will be disbursed in the form of medium-
and long-term loans that aim to support “key reforms” in return for Kiev
committing to policy changes.
The EU has already paid 1.2 billion euros in low-interest loans to Ukraine
since 2015 to help it cope with a devastating economic crisis triggered by
the annexation of Crimea by Russia, and a Kremlin-backed separatist
insurgency in its east.
But in 2017, the 28-member bloc withheld an additional tranche of 600
million euros because Kiev had not made enough progress on a wide-ranging
programme of reforms, including fighting corruption.
In March, in response to Ukraine’s request, the European Commission
proposed a new assistance package.
The proposal was adopted by the European Parliament and EU Council in
July, just weeks after Kiev set up an anti-corruption court — a key demand
of Ukraine’s Western backers.
The new funds will be disbursed in two instalments of up to 500 million
euros, each of which is conditional on Ukraine implementing measures demanded
by the EU.
“Our current timeframe is to work towards the first disbursement already
this year and then potentially the second disbursement in spring next year,”
Dombrovskis said.
The agreed programme of policy changes covers in particular the fight
against corruption, public finance management, and reforms in the energy
sector.
The loans will also be contingent on Ukraine meeting conditions of the
International Monetary Fund, which is in ongoing talks with Kiev on resuming
its $17.5-billion aid package.
BSS/AFP/HR/1010