On the 1st of August 2022, the European Commission, on behalf of the EU, has today disbursed the first half (€500 million) of a new €1 billion macro-financial assistance (MFA) operation for Ukraine. The second tranche (another €500 million) is disbursed on the 2nd of August. The decision about this new exceptional MFA was adopted by the European Parliament and the Council on the 12th of July 2022.
Macro-financial assistance (MFA) operations are part of the EU’s wider engagement with neighbouring countries and are intended as an exceptional EU crisis response instrument. They are available to EU neighbourhood countries experiencing severe balance-of-payments problems. In addition to MFA, the EU supports Ukraine through several other instruments, including humanitarian aid, budget support, thematic programmes, and technical assistance and blending facilities to support investment. To finance the MFA, the Commission borrows on capital markets on behalf of the EU, in parallel to its other programmes, most notably NextGenerationEU and SURE. The possible borrowing for Ukraine is foreseen in the Commission’s funding plan for the second half of 2022.
The MFA funds have been made available to Ukraine in the form of long-term loans on favourable terms. The assistance supports Ukraine’s macroeconomic stability and overall resilience in the context of Russia’s military aggression and the ensuing economic challenges. This loan to Ukraine is backed for 70% of the value set aside from the EU budget. This additional MFA of €1 billion is part of the effort by the EU, alongside the international community, to help Ukraine to address its immediate financial needs following the unprovoked and unjustified aggression by Russia. It is the first part of the exceptional MFA package of up to €9 billion announced in the Commission’s communication of 18 May 2022 and endorsed by the European Council of 23-24 June 2022. It complements the support already provided by the EU, including a €1.2 billion emergency MFA loan paid out in the first half of the year. Taken together, the two strands of the programme bring the total MFA support to Ukraine since the beginning of the war to €2.2 billion.
You can find the detailed breakdown per country on the Commission’s website.
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