EU may provide EUR 1 bln loan for Ukraine

The EU Commission is going to announce macro financial
assistance to its partner countries, of which Ukraine can count on over EUR 1
bln, former President Petro Poroshenko wrote in his blog on Apr. 21. He did not
specify whether this will be a separate program, or an extension of the
currently active MFA IV program, under which Ukraine is eligible to receive the
second tranche of EUR 0.5 bln by March 2021. Poroshenko expressed his hope that
Ukraine’s parliament will adopt the necessary legislation to initiate an IMF
program, which will pave the way for EU support.

Recall, Ukraine and the EU Commission signed in September 2018 a memorandum
for an MFA IV program for a EUR 1 bln loan, divided in two tranches. The first
tranche was disbursed in December 2018,
while the second has been available for the 2.5 years since the memorandum’s
signing. Ukraine has met all the requirements for the second tranche,
but the financing is now conditional on the start of the IMF program.

Alexander Paraschiy: We assume
the announced EUR 1 bln in support will be an extension of the MFA IV program.
Together with IMF financing (up to USD 4 bln) and other multilateral support,
Ukraine can count on up to USD 7 bln in loans, providing it implements the last
IMF-required step, which is the adoption of the banking law (or the so-called
anti-Kolomoisky law). Its completion is possible in early May.