Decision (EU) 2022/1201 providing exceptional macro-financial assistance to Ukraine

What it is

to provide EUR 1 billion exceptional macro-financial assistance (MFA) to Ukraine with a view to supporting, in particular, its economic resilience and stability. PROPOSED ACT: Decision of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: in spring 2014, Ukraine embarked on an ambitious reform programme with the aim of stabilising its economy and improving the livelihoods of its citizens. The fight against corruption as well as constitutional, electoral and judicial reforms are among the top priorities on the agenda. The European Parliament adopted by 522 votes to 17, with 25 abstentions, a legislative resolution on the proposal for a decision of the European Parliament and of the Council providing exceptional macro-financial assistance (MFA) to Ukraine. The European Parliament adopted its position at first reading under the ordinary legislative procedure by taking the Commission's proposal. Russia’s unprovoked and unjustified war of aggression against Ukraine since 24 February 2022 has caused Ukraine a loss of market access and a drastic drop in public revenues, while public expenditures to address the humanitarian situation and to maintain the continuity of State services have increased markedly. The present proposal for MFA to Ukraine follows Decision (EU) 2022/313 providing a EUR 1.2 billion MFA to Ukraine in the form of loans, fully disbursed in two tranches in March and May 2022. In order to address Ukraine's immediate and most pressing financing needs, the proposed decision aims at providing Ukraine with an additional MFA of up to EUR 1 billion in the form of a highly concessional long-term loan to support Ukraine's macro-financial stability and strengthen the country's resilience. This additional MFA, which is the first step in the implementation of the planned exceptional MFA of up to EUR 9 billion, is considered, under the current exceptional circumstances, as an appropriate short-term response to Ukraine's most pressing immediate financing needs and to the considerable risks to the country's macro-financial stability. The proposed EUR 1 billion disbursement should be supported by provisions available in the EU budget for the external action guarantee established under the Neighbourhood, Development and International Cooperation Instrument - Global Europe (NDICI-GE). In view of recent developments in Ukraine, the provisioning rate of 9% usually applied to countries facing a balance of payments crisis is not adequate in this case. The present proposal provides for a coverage rate of 70%, through provisions in the EU budget. By 30 June each year at the latest, the Commission should submit to the European Parliament and the Council, as part of its annual report, an evaluation of the implementation of this Decision in the previous year, including an assessment of such implementation. No later than two years after the end of the period of availability, the Commission should send the European Parliament and the Council an ex-post evaluation report.

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