The Council of the European Union has approved a proposal of the European Commission to provide EUR 1.2 billion of micro-financial assistance to help Ukraine to cope with the economic fallout of the COVID-19 pandemic.
The respective decision was taken on May 20 under the written procedure during sitting of the EU Council.
It is expected that after this Kyiv and Brussels will begin negotiations regarding the future Memorandum, which should specify the conditions for the allocation of the second tranche. Further, the Memorandum should be ratified by the Verkhovna Rada of Ukraine, after which Ukraine will receive the first tranche in the amount of EUR 600 million, which is unconditional. The horizontal condition for obtaining macro-financial assistance is mandatory cooperation with the IMF.
On May 15, European Parliament backed the commission’s proposal.
The macroeconomic aid of EUR 1.2 billion the European Commission has decided to propose to Ukraine will be disbursed at two installments, Ukraine’s envoy to the EU Mykola Tochytsky told Interfax-Ukraine in Brussels on Wednesday.
The first EUR 600 million will be allocated unconditionally, immediately after adoption by the European Parliament and the Council of the EU, and the other EUR 600 million will be extended under some specific conditions, which the EU and Kyiv will begin negotiating in the near future, Tochytsky said in commenting on the European Commission’s decision to distribute EUR 1.2 billion in emergency macro-financial assistance to Ukraine to limit the economic fallout of the coronavirus pandemic.
“The first tranche of EUR 600 million will be provided unconditionally and the second upon Ukraine’s compliance with criteria to be agreed upon with Kyiv within the next few months,” he said.
Asked what these criteria could be, Tochytsky pointed out that no specific talks on the matter have been started so far, but, judging by the criteria set for other similar agreements concluded earlier between Kyiv and Brussels, these could be some measures related to public finance administration, anti-corruption efforts, taxation, labor and social protection, business climate, customs, and so on.
“Apart from the EU, there is no other association of countries that could provide a similar amount of assistance not only to its members but also to other partners. We are grateful to our European partners for their extremely timely and significant support for our economy, business and population,” he said.
In procedural terms, the provision of this EUR 1.2 billion emergency macro-financial assistance by the European Commission is “only the beginning,” as it has yet to be adopted by the European Parliament and the Council of the EU, Tochytsky said. “Simultaneously, negotiations will proceed on signing a relevant memorandum between Ukraine and the EU, which will be subject to ratification by the Ukrainian Verkhovna Rada after its signature. In other words, this is a lengthy process,” he said.
The European Union provides macro-financial assistance only to its partners that successfully cooperate with the International Monetary Fund (IMF), Tochytsky said. “This is a general condition. Therefore, the disbursement of the last, the fourth, tranche of the fourth macro-financial assistance program, which was endorsed back in September 2018, as well as the second tranche of the present emergency macro-financial assistance, depends on the passage by the parliament of the so-called banking bill in an edition agreed upon with the IMF,” he said.
Considering this, the Ukrainian diplomat said he expected that the fourth installment of EUR 500 million will be disbursed in the first half and the EUR 600 million of the emergency assistance in the second half of the year.
Apart from this, the EU decided on April 8 to offer Ukraine an aid package in the amount of EUR 190 million, Tochytsky said. “These resources, in particular, will be allotted for helping the people living in the areas that suffered from Russian aggression in the eastern part of the country. This includes EUR 30 million as so-called technical assistance for the Ukrainian healthcare system, which implies not only the procurement of the necessary equipment and supplies but also for upgrading [the medical personnel’s] qualification and facilitating the Health Ministry’s legislative work,” he said.
Another EUR 45 million is to be spent on a program of support for small and medium-sized businesses and the already existing programs, and some part of this sum will also be offered as easy loans, including those denominated in hryvnias, Tochytsky said.
This assistance also includes EUR 10 million for a state administration support program, and some funds will also be provided to non-governmental organizations, he said.
As another example of EU’s financial assistance to Ukraine, Tochytsky mentioned the allocation of EUR 13 million of humanitarian aid disbursed on April 16. “This tranche will be spent not only on fighting coronavirus but also on other needs, such as, for example, water supply restoration,” he said.
The European Union’s position to support the sovereignty and territorial integrity of Ukraine is unchanged, High Representative/Vice-President Josep Borrell said. High Representative/Vice-President Josep Borrell gave such assurances to Minister of Foreign Affairs of Ukraine Dmytro Kuleba during a telephone conversation on Tuesday, April 21 before the meeting with EU Foreign Affairs Ministers, which will also consider the Ukrainian issue. This was announced by the EU press service on Wednesday.
“High Representative Borrell underlined the EU’s steadfast support to Ukraine’s sovereignty and territorial integrity. He welcomed Ukraine’s continued reform efforts, highlighting in particular the importance of the banking law in this regard,” the message reads.
He also highlighted the EU’s support to Ukraine in response to the coronavirus outbreak. EUR 190 million has been allocated to Ukraine, to support the health sector and social and economic recovery. In that context, they also emphasized the importance to counter disinformation surrounding the pandemic.
“They discussed the recent release and exchange of detainees related to the conflict in eastern Ukraine that took place on 16 April, and the need to continue work to implement the Minsk agreements,” the press release reads.
High Representative Borrell looked forward to visiting Ukraine as a priority once the conditions allow.
Ukraine could limit imports of cheese from the European Union (EU) over almost doubled increase in supplies of cheese in 2019 and due to growth of smuggling, Deputy Economic Development, Trade and Agriculture Minister of Ukraine, Taras Kachka, who is also the Trade Representative of Ukraine, has said.
“I’m very annoyed by the situation with the sharp increase in imports of cheeses and generally dairy products from the EU to Ukraine, even smuggling… To stop this, we can take very brutal steps. For example, safeguard measures against the import of cheeses into Ukraine,” Kachka said in an interview with Yevropeiska Pravda (European Truth) ezine.
He said that the sharp increase in imports of these products negatively affects Ukrainian producers.
“If our manufacturers make such a request, it is very likely [that such a scenario will be implemented],” the trade representative said.
“But this is a negative scenario, which can be avoided through greater coordination and greater support for each other. This coordination is much more important to me now in relations with the EU than the revision of tariff quotas,” he said.
The foreign ministers of Ukraine, Georgia and Moldova have addressed the European Union together regarding the importance of support for the Eastern Partnership, according to the press service of the Foreign Ministry of Ukraine.
“On the margins of the Munich Security Conference the Ministers of Foreign Affairs of Ukraine, Georgia and Moldova have signed a joint letter to the Members of the European Commission regarding importance of relevant financial support for the Eastern Partnership in the next EU Multiannual Financial Framework for 2021-2027 that is currently being shaped by the EU institutions,” reads the statement.
The ministers called on the EU to take into account within its strategic budgetary planning for the next seven years the scale and ambitions of the reforms, which are being implemented and planned by Ukraine, Georgia and Moldova in the process of their European integration.
“The joint address of the Ministers is another sign of unity of Ukraine, Georgia and Moldova in their approaches to future development of the Eastern Partnership, based on the differentiation principle, as well as to the idea of enhanced dialogue in the EU+3 Associated Partners format,” reads the statement.
The timely reaction to the avian influenza outbreak in Ukraine allowed the country not to halt imports of poultry from the European Union (EU) and Ukrainian counts on uninterrupted authorization to export Ukrainian poultry to the EU, Deputy Economic Development, Trade and Agriculture Minister, Ukraine’s Trade Representative Taras Kachka has said. “Over the past month, a number of EU Member States have recorded cases of avian influenza. But a timely decision on zoning and a well-functioning communication mechanism allowed Ukraine to not stop the import of poultry meat from the EU for this reason. Therefore, we immediately informed the competent authorities of the EU about the detected case of bird flu in Vinnytsia region,” he wrote on his Facebook page on Thursday.
In addition, Ukraine has suspended certification of exporter capacity in a 30 km zone, while the EU sets requirements for the 10 km zone.
“All these measures are being taken to prove to the whole world that trust allows us to maintain trade in such sensitive situations,” Kachka said.
The deputy minister expects that in such conditions the EU will retain a permit for the import of poultry meat from Ukraine.
“If we were hostile to each other, the EU would have taken this opportunity and tried to close imports from Ukraine in general. This would trigger a chain mechanism of mutual restrictions. (Both sides want to avoid this scenario). In the meantime, we are actively cooperating with EU regulatory authorities so that the reaction is friendly and adequate,” Kachka said.