Ukraine is a partner country within the European Neighbourhood Policy (ENP). This country page contains, or links to, DG ECFIN’s recent analytical work on the economy of Ukraine.
The European Commission strongly supports Ukraine in the economic field, by organizing a Vienna Initiative Financial Forum on Ukraine, providing economic analysis on the country providing Macro-Financial Assistance, and holding regular economic dialogues with the Ukrainian authorities.
A first Macro-Financial Assistance(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 Memorandum of Understanding outlining the economic and financial policy conditions for the disbursement of the assistance was signed in February 2013. The first tranche of EUR 100 million was disbursed mid-May 2014, shortly after the IMF approved a new two-year Stand-By Arrangement (SBA) for Ukraine. The second tranche of EUR 260 million was disbursed in mid-November 2014. A last disbursement of EUR 250 million will follow in 2015, subject to successful implementation of the policy conditions agreed with Ukraine and a continuous satisfactory track record of the ongoing IMF programme.
In light of political developments in early 2014 and the acute vulnerability of the Ukrainian economy and the country's acute balance of payments needs, the Commission proposed on 19 March 2014 a new MFA loan of up to EUR 1 billion. This proposal was accompanied by a detailed evaluation of the economic issues in Ukraine and the related MFA objectives. It was endorsed through a decision adopted by the Council on 14 April 2014. The Memorandum of Understanding listing the policy conditions associated with the disbursement of the funds was signed in May 2014. The two tranches of each EUR 500 million were disbursed in June and December 2014.
Disbursement of the funds under both MFA operations are subject to satisfactory progress with policy conditions, which fall into four thematic areas (as reflected in the Memoranda of Understanding): public finance management and anti-corruption; trade and taxation, energy and financial sector. Disbursement is also conditional on a continuous satisfactory track record of implementing an adjustment and structural reform programme that is supported by the IMF Stand-By Arrangement.
In the context of a deeper than expected economic recession notably linked to the continuing conflict in the east of the country, Ukraine's external financing needs have increased significantly, which led the Commission to propose a third MFA loan of up to EUR 1.8 billion on 8 January 2015. This new MFA programme, once approved by the European Parliament and the Council, will be part of the EU's support for the economic adjustment and structural reform programme of the Ukrainian authorities in the context of the ongoing balance of payments crisis.
On 14 November 2014, the European Commission hosted the Vienna Initiative Financial Forum on the Banking Sector in Ukraine. This Forum provides a unique platform for the Ukrainian authorities, commercial banks, international financial institutions, the EU and other key stakeholders to meet and discuss ways to drive forward much-needed reforms in the financial sector.
The EU held its last Subcommittee on Economic, Financial and Statistical Issues with Ukrainian authorities in Kiev in October 2013.
The European Commission presented the EU economic outlook based on the spring 2013 economic forecast. The Ukrainian authorities presented recent macroeconomic developments in their country. The meeting provided the opportunity to discuss the weak state of the Ukrainian economy, in particular its deteriorating balance of payments situation and its urgent need for fiscal consolidation. The meeting also provided the opportunity to discuss the status of the discussions with the IMF on a new IMF programme.