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Ukraine to get additional EU emergency loans in return for economic reforms

Ukraine to get additional EU emergency loans in return for economic reforms
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Ukraine is to receive an additional one billion euros in emergency loans from the European Commission, on top of the 610 million euros already offered.

The cash is needed to help stabilise Ukraine’s faltering economy, but Kyiv will only get it when there are guarantees on major economic reforms.

EU Finance and Monetary Affairs Commissioner Olli Rehn said: “This financial aid will help in stabilising the worsening financial situation in Ukraine and therefore will be one vital part of achieving a solution to the crisis.”

Rehn explained the medium-term loans will come from MFAs – or macro-financial assistance: “The first tranche is 100 million euros from the existing MFA and 500 million euros from the new MFA, which has been decided and proposed today. This 100 plus 500 million euros should be ready to be disbursed right after an agreement on an IMF programme for Ukraine has been concluded.”

Ukraine’s interim government is currently talking with International Monetary Fund officials, and expects a first draft of the programme to be ready by the end of the week.

Olli Rehn said reforms – such as ending massive government electricity subsidies – should improve management of the economy thereby boosting growth and public finances as well helping the fight against corruption.

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