Today in Riga, Ukraine and the European Union signed
the Memorandum of Understanding and the Loan Agreement related to the third
Macro-Financial Assistance (MFA) package from the EU totaling €1.8 billion. The
documents were signed on behalf of Ukraine by the Minister of Finance of
Ukraine Natalie Jaresko and the Governor of the National Bank of Ukraine
Valeriya Gontaryeva. Vice-President of the European Commission Valdis
Dombrovskis signed on behalf of the European Union.
The new MFA package will be provided as a part of a
broader package of financial support for Ukraine from its bilateral
and multilateral partners. The aim of the EU financial package is to help
Ukraine to stabilize its financial system, to improve its balance of payments,
and to implement reforms.
It is the third Macro-Financial Assistance package provided to Ukraine by
the European Union. The EU has already provided financing for a total amount
of €1.61 billion euro in two previous MFA programs. Together with the new
program the volume of financing on behalf of the EU will be equal to €3.41
billion. This is the largest volume of financial support for a non-EU country.
“On behalf of the Government of Ukraine and the Ukrainian people, I would
like to express my gratitude to the European Union for its crucial support.
This Macro-Financial Assistance package is a testament to the EU’s belief that Ukraine can steer through this
challenging period and progress along its path of reform and transformation,” the Minister of Finance, Natalie Jaresko, stated on the occasion of the
document’s signing. She
underlined that the Government of Ukraine is fully committed to working side by
side with European partners.
Ukraine will receive the first tranche of the third Macro-Financial Assistance
program worth €600 million in the second half of June 2015, after the
Memorandum and Loan Agreement is ratified by Verknovna Rada of Ukraine and the
IMF Executive Board approves the second tranche of the Extended Fund Facility
Program.
Key facts about Macro-Financial Assistance (MFA):
· The third
Macro-Financial Assistance program of the EU provides up to €1,8 billion in the
form of a medium-term loan.
· The MFA is provided to
the EU partner countries that experience serious balance of payment
difficulties.
· The EU Macro-Financial
Assistance is complementary to the Program of Cooperation between Ukraine and
International Monetary Fund Extended Fund Facility.
· The MFA
is provided due to the successful implementation by Ukraine of the current
Extended Fund Facility Program with the International Monetary Fund.
· The Memorandum of
Understanding defines preconditions for funds allocation of each tranche of
assistance and the Loan Agreement defines technical particularities of
loan provision.
· The terms of interest
of the loan will be determined when the European Commission, which has the
highest credit rating (AAA), borrows money on the financial markets. This will
then be lent at the same rate of interest to Ukraine.
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