Ukraine, EU sign memorandum on EUR 1 bln loan program

Ukrainian officials signed a memorandum and loan
agreement for EUR 1 bln on Sept. 14 with the EU Commission, Ukraine’s MinFin
reported the same day. The EU program of macro-financial assistance for Ukraine
(MFA IV) consists of two loan tranches of EUR 0.5 bln each, with a duration of
up to 15 years. Ukraine’s MinFin expects the first tranche will be provided
this year and the second in the spring, conditional on the successful review of
Ukraine’s implementation of the program’s conditions.

Alexander Paraschiy: This was
one of the formalities on the way for Ukraine to receive its first loan tranche
under the MFA IV program, after the European Parliament approved it in
June. Other important formalities are the deal’s
ratification by Ukraine’s parliament, and, most importantly, positive feedback
from the IMF on its loan program with Ukraine.

Ukraine receiving the first tranche under the MFA IV
program in 2018 is our base-case scenario, and it’s very likely to happen. We
will assess the probability of Ukraine gaining the next tranche in 2019 after
understanding what homework the government has to complete to secure it. So
far, the probability of a 2019 tranche is no more than 50%.