KYIV, Ukraine, February 25, 2013 /PRNewswire/ --
The EU agrees to provide balance-of-payments support to Ukraine within its policy instrument of macro-financial assistance. The total of EUR 610 million, provided under the program, is to complement financing supplied by the IMF. The respective agreement between Ukraine, and the EU was signed during the 16th Ukraine - EU summit, held in Brussels, Belgium, on February 25, 2013.
According to the document, the Eastern European country will receive separate loans of EUR 100, 10, 250, and 250 million over the period of two years. The first disbursement will take place after the memorandum comes into force and the European Commission approves Ukraine's progress on its commitments to the IMF. The next tranches will be provided following Ukrainian government's fulfillment of the commitments, stated in the Memorandum of Understanding, regarding public finance management, trade, energy sector, as well as tax and finance policy.
The implementation of the Macro-Financial Assistance (MFA) to Ukraine was approved in 2010, informs the official website of the European Commission. At the time, the decision stipulated the issuance of EUR 500 million. EUR 110 million had been agreed upon back in 2002.
MFA is an EU policy used to provide untied and undesignated balance-of-payments support to the Union's partner countries. The policy "complements financing provided in the context of an International Monetary Fund's reform programme." The instrument helps combine IMF assistance end the EU efforts to stimulate structural reform in target countries.
Currently, Ukraine is negotiating a new loan from the IMF. The Eastern European country is counting on a USD 15 billion loan under the stand-by program, which has been suspended in December 2010. In order to unlock further disbursement, Ukraine needs to change its domestic policy; namely, increase gas and heating prices for households.
The EU - Ukraine financial cooperation began in 1991. Assistance provided by the European Community to Ukraine since then exceeded EUR 2.5 billion. Under the National Indicative Programme for 2011-2013 Ukraine is to receive EUR 470 million, which is 27 percent more than under the previous three-year program. The current program focuses on border management, energy, and climate change as well as on coming into force of the EU-Ukraine Association Agreement, according to the Delegation of the EU to Ukraine.
SOURCE Worldwide News Ukraine