The European Commission agreed to release a €600m loan to Ukraine on Thursday, bringing the total amount of direct financial assistance it has given the battle-scarred country since 2014 to €2.81bn, the largest amount disbursed to any non-EU country.
The EU funds, which will be sent by early April, are intended to shore up the country’s finances as Kiev simultaneously grapples with challenging structural reforms and a state of quasi-war with Russian-backed separatist enclaves. The IMF is expected to approve a further $1bn payment from a $17.5bn assistance programme on March 20.
The Commission said in a statement that the aid is key to helping Ukraine cover external financing needs and supporting structural reforms. It also praised local authorities for “taking important measures to step up the fight against corruption, to foster greater transparency in public finance management, to modernise the public administration, to advance the ongoing reforms of the energy and financial sectors, to improve the business environment and to strengthen social safety nets”.
“These structural reforms will benefit Ukraine’s citizens – the ultimate aim of the EU’s assistance,” the statement added.
Valdis Dombrovskis, commission vice president, summed things up saying:
Ukraine has done a remarkable job of stabilising and reforming its economy, despite the armed conflict unfolding on its soil. We wish to see the positive reform momentum in Ukraine continue. With today’s disbursement of the second payment of €600m to Ukraine, the EU reaffirms its long-standing commitment to support Ukraine in its efforts to maintain stability and ensure economic recovery in the country.
Ukraine’s programme with the IMF envisions that the government will implement crucial pension reform, establish conditions for a competitive agricultural land market and step up anti-graft efforts through formation of a special anti-corruption court after receiving the next disbursement .