Financing will occur through the Ukraine Facility program
All 27 EU leaders agreed on an additional €50 billion support package for Ukraine under the EU budget. The announcement was made by the President of the European Council, Charles Michel.
“ This guarantees constant, predictable and long-term financing for Ukraine . The EU is taking the lead and responsibility in supporting Ukraine; we know what’s at stake,” he said, writing on the social networking site X.
The vote on the Ukraine Support Mechanism in the European Council is a powerful sign of partners' continued support for Ukraine, said Yulia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.
“The next step will be to determine the final conditions of the program within the framework of a trialogue between the European Council, the European Commission and the European Parliament. The final regulations should be adopted by the European Parliament during the plenary session scheduled for February 26th and 29th», he explained.
According to her, Ukraine expects to receive the first payment of 4.5 billion euros in March. The government is currently working on a transitional funding agreement with its European partners.
The First Deputy Prime Minister added that the European Council's decision also reflects a positive assessment of the preparation of the Mechanism Plan for Ukraine. Once approved by the European Parliament, the regulations will take into account the relevant final conditions of the programme. After approval of the document by the government, the Plan will be submitted to the European Commission.
The Mechanism Plan for Ukraine envisages the implementation of structural reforms in the public sector and a series of economic reforms, as well as measures to develop priority sectors. Support under the EU Mechanism for Ukraine program will be provided on a quarterly basis to meet the reform implementation criteria set out in the document.
The Ministry of Economy recalled that the Mechanism for Ukraine foresees the provision of 50 billion euros to Ukraine during 2024-2027. Of this amount, 39 billion euros will be allocated to the State budget to reinforce macro-financial stability.
The program also provides for a special investment instrument to cover risks in priority sectors. Its volume will amount to 8 billion euros.
The Ukraine Mechanism budget provides for a separate area of technical support, including funds to cover interest on loans under the program, which will amount to 3 billion euros.
As the GMK Center previously reported, in November 2023, Ukraine became a full participant in the EU Connecting Europe Facility (CEF) program – the relevant agreement was ratified by parliament. The CEF operates within the framework of the “Paths of Solidarity” initiative, its implementation will contribute to the improvement of transport links between Ukraine and the EU and the establishment of exports to European countries as a whole.
