EU announces at least EUR 11 bln in potential aid to Ukraine

European Commission President Jose Manuel Barroso announced on March 4 the EU has prepared a package of at least EUR 11 bln in potential financial aid for Ukraine consisting of grants and loans. The package consists of both short- and long-term measures to ensure economic, technical and financial support for Ukraine, Barroso said. Its key elements up to EUR 8 bln from the European Investment Bank and European Bank for Reconstruction and Development, a potential EUR 3.5 bln from the Neighborhood Investment Facility and EUR 3 bln from the EU budget. The measures also call for modernizing Ukraine’s gas transit system (include reverse transit from Slovakia), creating a coordinating platform for donor activity and the immediate introduction of the Deep and Comprehensive Free Trade Area after the signing of the EU Association Agreement.

Alexander Paraschiy: The aid package is a very positive signal for the economy, particularly Ukraine’s external accounts. Such inflows allocated on institutional changes, economic reforms and investment projects will cover a solid part of its currency needs and will build fundamentals for sustainable economic development in the long run. With the EU offering such help, the future of the Ukrainian state will depend on whether the interim government and its successor (in June) will be able to make the most of this aid and not waste it on populist measures or corruption.