EU Commission approves EUR 1.2 bln emergency MFA program for Ukraine

2 February 2022

The European Commission approved on Feb. 1 an emergency macro-financial assistance (MFA) program for Ukraine worth EUR 1.2 bln, which had been announced by the Commission’s president last week. After approval by the EU Council and European Parliament, as well as the signing of a memorandum with the Ukrainian government, the first tranche of the new MFA worth EUR 600 mln will arrive. The second tranche of the same size will be conditional on Ukraine’s implementation of policy measures agreed in the memorandum and progress in Ukraine’s cooperation with the IMF, the EU Commission stated. 

 

Alexander Paraschiy: The support from the EU, IMF and other official partners could secure most of the government’s USD 5.3 bln plan for the external financing of the state deficit and refinancing of maturing external debts in 2022. The prospects of such financial backing have already improved the perception of Ukraine’s sovereign risk despite the remaining threats of Russian military aggression. Further news on financial support from Ukraine’s western partners are likely to lower Ukraine’s sovereign risks further.