The European Parliament supported the regulation on launching a support program for Ukraine
In March 2024, the Ukrainian government is expected to approve a plan for the Ukraine Mechanism, which will subsequently be presented to the European Commission. This is stated in a statement from the Ministry of Economy.
On February 27, the European Parliament supported the regulation on the launch of the Mechanism for Ukraine, which defines the areas, forms and procedures for providing financial support to Ukraine.
The €50 billion EU program will run from 2024 to 2027.
“Approval of the Ukraine Mechanism program will strengthen our macroeconomic stability and bring Ukraine closer to EU membership. The Regulation contains the final terms of the program, including the Facilities Plan for Ukraine, which will be approved by the government in March and submitted to the European Commission,” said First Deputy Prime Minister – Minister of Economy, Yuliya Svyridenko.
The Ukraine Mechanism is divided into three main components:
- the first – direct support from the State Budget – 38.27 billion euros (33 billion euros in the form of loans and 5.27 billion euros in the form of grants);
- the second – a special investment instrument to cover risks in priority sectors – 6.97 billion euros;
- the third – technical support in the implementation of reforms, as well as interest coverage on loans, including those previously received – 4.76 billion euros.
Furthermore, the program provides for a transitional financing mechanism that will allow Ukraine to receive support for the state budget before the full launch of the Ukraine Facility. The Ukrainian Cabinet of Ministers is currently working with its European partners to finalize a memorandum, which is expected to be signed in March.
After the Plan takes into account the final requirements of the Ukraine Mechanism regulations, the document will be approved by the government and submitted to the EC. Final approval of the Plan by the EU is scheduled for April, which will allow the mechanism to fully function.
The Facility Plan for Ukraine forms the basis for the provision of budget support under the programme. It envisages the implementation of structural reforms in the public sector, a series of economic reforms aimed at developing the business climate and entrepreneurship, as well as measures to develop priority sectors that can ensure rapid economic growth.
As noted by the Ministry of Economy, budget support under the Mechanism for Ukraine will be provided quarterly to meet the criteria set out in the Plan for implementing the planned reforms.
As the GMK Center previously reported, the investment mechanism is part of the Ukraine Mechanism and will promote the involvement of at least $30 billion in additional investments over the next four years through the provision of guarantees to international financial organizations, it reported Yulia Svyridenko. The First Deputy Prime Minister noted that in 2024, Ukraine continues to improve the investment climate and implement important reforms for the effective functioning of business.
Furthermore, on February 1, all 27 leaders of European Union countries agreed on an additional support package for Ukraine worth €50 billion within the EU budget.
