Ukraine gets EUR 600 mln MFA tranche from EU

The European
Commission disbursed a EUR 600 mln loan tranche to Ukraine on Oct. 25, it
reported the same day. This was the second tranche under the macro-financial
assistance (MFA) for EUR 1.2 bln related to alleviating the economic
consequences of the COVID-19 pandemic. Ukraine
received the initial tranche of the same size in December. In
mid-September, the European Commission reported that the decision to disburse the
second tranche had been made, with money to come in October.

Recall, Ukraine has
been granted the largest amount (of ten countries) of the EU’s COVID-related
MFA program, with a total amount of EUR 3 bln.

With this tranche,
total loans to Ukraine under EU’s various MFA programs reached EUR 4.4 bln, the
Commission reported.

The tranche “is a
clear sign of EU support for Ukraine’s reform agenda,“ Valdis Dombrovskis,
European  Commissions’ executive vice-president, commented. “Ukraine has
implemented all eight policy commitments relating to public finance management,
governance and rule of law, improving the business climate, and sectoral
reforms and state-owned enterprises,” the Commission’s press-release stated
adding that Ukraine also made progress in policies under IMF program, in
particular “the major legislative advances in the judicial area.”

Alexander Paraschiy: There is no surprise in this news, taking into account that the
decision had been made more than a month ago and that Ukraine managed to make
progress in its cooperation with the IMF since then. If the Ukrainian
government doesn’t make any sharp moves to damage its reform achievements by
late November, it can also count on the IMF’s loan tranche of about USD 700
mln. All these amounts will support Ukraine’s financial stability and decrease
the need to finance the fiscal deficit in late 2020.