Ukraine is one of the 16 partner countries whose relations with the EU are framed by the European Neighbourhood Policy (ENP). This country page presents information on DG ECFIN’s activities and economic cooperation with Ukraine.
The European Commission strongly supports Ukraine in the economic field, by providing macro-financial assistance in the form of loans, budget support and humanitarian assistance in the form of grants, technical assistance and indirect support through trade preferences granted in the framework of the Deep and Comprehensive Free Trade Agreement which entered into force on 1 January 2016, to name just a few. In addition, Ukraine benefits from loans from the European Investment Bank and the European Atomic Energy Community.
The European Commission is committed to actively supporting Ukraine in the challenging times it is going through. Since the outbreak of the crisis in early 2014, the European Commission has mobilised a total of EUR 3.4 billion in Macro-Financial Assistance through three consecutive programmes of low-interest loans. This represents the highest amount ever made available by the EU to a third partner in such a short time. Out of these EUR 3.4 billion, 2.2 billion were disbursed in 2014 and 2015.
In 2014 and early 2015, a total of EUR 1.61 billion worth of loans was disbursed by the EU to Ukraine under two successive Macro-Financial Assistance (MFA) operations. A first MFA package of EUR 610 million, based on decisions from 2002 (EUR 110 million) and 2010 (EUR 500 million), was provided to Ukraine to help support economic reforms in the country and address persistent external financing difficulties. The first tranche of EUR 100 million was disbursed in May 2014, followed by a second disbursement of EUR 260 million in November 2014 and a last disbursement of EUR 250 million in April 2015.
Key documents relating to MFA I (disbursed in 2014-15):
In light of political developments in early 2014 and of the acute balance-of-payments crisis experienced by Ukraine, the Commission proposed on 19 March 2014 a second MFA operation of up to EUR 1 billion. This proposal was accompanied by a detailed evaluation of the economic challenges facing Ukraine and of the objectives pursued through the MFA operation. It was endorsed through a decision adopted by the Council on 14 April 2014. The two tranches of EUR 500 million each were disbursed in June and December 2014.
Key documents relating to MFA II (disbursed in 2014):
However, faced with a deep economic recession and a severe confidence crisis due to the protracted armed conflict in the Eastern part of the country, Ukraine requested additional financial assistance from the EU and other international partners in late 2014. On 8 January 2015, the Commission issued a proposal for a third MFA programme for Ukraine of up to EUR 1.8 billion, in order to alleviate the country's large external financing needs and to support the ambitious reform programme of the authorities. The European Parliament and the Council officially adopted the Decision on the third MFA programme for Ukraine on 15 April 2015. On 22 May 2015, Ukraine and the EU jointly signed a Memorandum of Understanding outlining the policy programme attached to the MFA operation. This programme largely builds on the reform agenda pursued by the Ukrainian authorities and covers a broad range of areas, including public finance management, governance and transparency, the energy sector, social safety nets, business environment and the financial sector. The Memorandum of Understanding and Loan Facility Agreement related to MFA III were ratified by the Ukrainian Parliament on 18 June 2015. On 22 July 2015, the European Commission disbursed the first tranche of EUR 600 million under the new macrofinancial assistance programme.
Key documents relating to MFA III (ongoing):
DG ECFIN conducts regular analysis on macroeconomic and financial developments in Ukraine.
The EU and Ukraine hold regular macroeconomic dialogues in the framework of the Subcommittee on Economic, Financial and Statistical Issues that they jointly set up in 1998. Meetings of the Subcommittee provide both partners with an opportunity to exchange views on their respective economic situations and outlooks, and on the major structural challenges that they face.
The latest Subcommittee on cooperation in macroeconomic, financial and other sectors took place on 8 and 9 October 2015 in Kiev. It was chaired by the Deputy Minister of Finance, for the Ukrainian side, and by the Director for International economic and financial relations and global governance at DG ECFIN, for the EU side. Topics discussed included respective economic outlooks, EU economic assistance to Ukraine, financial sector regulation and stabilisation, as well as bilateral cooperation in public financial management, internal control and external audit, statistics, anti-fraud and control provisions.