Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on providing macro-financial assistance to Ukraine
Date: 2022-02-01
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU aid, EU loan, European neighbourhood policy, Ukraine, coronavirus disease, economic reform, economic stabilisation, enlargement of the Union, epidemic, macro-financial assistance

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   EUROPEAN COMMISSION  Brussels, 1.2.2022  COM(2022) 37 final 2022/0026 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on providing macro-financial assistance to Ukraine {SWD(2022) 25 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Ukraine has been developing a strong partnership with the European Union since 2014, going 
beyond  mere  bilateral  cooperation  to  evolve  towards  gradual  political  association  and 
economic integration. The EU-Ukraine Association Agreement, which entered into force on 1 
September 2017 and includes a Deep and Comprehensive Free Trade Area, is the main tool 
for  bringing  Ukraine  and  the  EU  closer  together.  In  addition  to  promoting  deeper  political 
ties, stronger economic links and the respect for common values, the Agreement has provided 
a  solid  framework  for  pursuing  an  ambitious  reform  agenda,  focused  on  the  fight  against 
corruption, an independent judicial system, the rule of law, and a better business climate. The 
EU  has  shown  continuous  support  for  these  reforms,  which  are  crucial  for  attracting 
investments,  boosting  productivity  and  lifting  the  standards  of  living  in  the  medium  term. 
Among  other  support  instruments,  the  EU  has  supported  Ukraine  through  five  consecutive 
Macro-Financial  Assistance  (MFA)  operations  that  totalled  EUR  5  billion  of  loans  in  the 
period 2014-2021. 

However,  notwithstanding  the  strategic  long-term  political  orientation  and  commitment  to 
implementing reforms, Ukraine continues to face significant challenges. Since the outbreak of 
the  COVID-19  pandemic,  more  than  3.8  million  contaminations  resulted  in  almost  100,000 
deaths. The return to economic growth in 2021  was slow, driven primarily by the retail and 
construction sectors, and the outlook is surrounded by considerable risks. Inflation accelerated 
and  reached  10%  at  the  end  of  2021.  The  growing  geopolitical  tensions  at  its  border  with 
Russia  have  had  considerable  knock-on  effects  on  confidence,  in  particular  of  foreign 
investors.  The  national  currency  has  lost  9%  of  its  value  relative  to  the  USD  since  mid-
November  2021,  despite  interventions  by  the  National  Bank  of  Ukraine  for  about  USD  1.6 
billion during the same period, thereby drawing down the stock of official reserves by 5.5%.  

In  this  context,  the  yields  on  the  Ukrainian  government  Eurobonds  increased  to  prohibitive 
levels in mid-January 2022. Private financing of the underlying balance-of-payments  gap of 
Ukraine is thus no longer available at sustainable terms. Based on the latest projections by the 
International Monetary Fund in their first programme review, concluded on 8 November and 
approved  on  22  November  2021,  the  lack  of  access  to  capital  markets  would  imply  a 
widening of the country’s funding gap by the equivalent of, at least, USD 2.5 billion in 2022. 
Moreover,  the  escalating  geopolitical  tensions  are  having  a  detrimental  effect  on  Ukraine's 
already  precarious  economic  and  financial  stability.  Persistent  security  threats  have  already 
triggered  a  substantial  outflow  of  capital.  The  negative  impact  on  future  investment,  where 
Ukraine  has  been  lagging  behind  regional  peers  already,  further  reduces  the  country’s 
resilience  to  both  economic  and  political  shocks.  Furthermore,  the  multiple  threats  that 
Ukraine  currently  is  facing  put  a  lot  of  pressure  on  state  institutions  to  protect  its  citizens, 
which  generates  significant  additional  risks  to  the  overall  stability  of  the  country  and  the 
broader society. 

Against  the  backdrop  of  the  loss  of  access  to  international  capital  markets  due  to  the 
heightened geopolitical  uncertainty and its impact on the economic situation in  Ukraine, the 
Commission is submitting to the European Parliament and the Council a proposal to provide a 
new MFA of EUR 1.2 billion in the form of loans to foster stability in Ukraine. 

The  planned  emergency  MFA,  put  forward  to  provide  swift  support  in  a  situation  of  acute 
crisis and to strengthen the resilience of the country, will have a duration of 12 months and 
include  two  disbursements.  The  release  of  the  first  tranche,  subject  to  the  political 

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precondition and a satisfactory implementation of the  IMF programme, would occur swiftly 
after  the  approval  of  this  proposal,  upon  entry  into  force  of  the  Memorandum  of 
Understanding  (MoU)  on  specific  structural  policy  measures,  agreed  between  the  European 
Commission on behalf of the EU and Ukraine. The disbursement of the second tranche would 
be linked to the continuous satisfactory  implementation of both  an  IMF  programme and the 
policy measures agreed in the MoU. The MoU underpinning this emergency macro-financial 
assistance  operation  is  likely  to  focus  on  a  limited  number  of  feasible,  short-term  policy 
actions  in  the  most  urgent  priority  areas,  such  as  strengthening  economic  resilience  and 
stability, governance and rule of law, and energy. A subsequent, longer-term MFA could look 
beyond  the  immediate  crisis  and  focus  on  a  broader  set  of  reform  priorities.  The 
implementation  of  the  proposed  operation  is  expected  to  go  hand-in-hand  with  the  support 
under  budgetary  operations  financed  by  the  Neighbourhood,  Development  and  International 
Cooperation Instrument (NDICI). The announced additional allocation of EUR 120 million in 
NDICI  grants  will be important  to  further strengthen Ukraine’s state-building and resilience 
efforts. Moreover, the EU will work closely with Ukraine to follow up on their request for a 
subsequent, regular MFA operation when the situation stabilises.  

As  further  elaborated  in  the  Commission  Staff  Working  Document  accompanying  this 
proposal,  the  Commission  considers,  based  also  on  the  assessment  of  the  political  situation 
made by the European External Action Service, that the political and economic pre-conditions 
for the proposed MFA operation are satisfied. 

• 

General context  

The risks from the current geopolitical tensions and the security concerns at the border with 
Russia  have  been  rising  steadily  since  mid-November.  They  have  weighed  heavily  on 
investors’  confidence,  as  evidenced  by  a  steady  outflow  of  capital  and  drain  on  official 
foreign  reserves.  The  weakening  of  the  hryvna,  despite  continued  interventions  by  the 
National Bank of Ukraine in support of the domestic currency, and the de facto loss of access 
to  capital  markets  for  the  government  increase  the  risks  to  the  macroeconomic  outlook  of 
Ukraine  significantly.  Following  a  less  severe-than-expected  recession  of  4%  only  in  2020, 
the Gross Domestic Product contracted by 2.2% year-on-year in the first quarter of 2021. The 
second  quarter  rebound  by  5.7%  year-on-year  is  disappointing,  given  the  size  of  the  earlier 
contraction, and was followed by a deceleration of growth to 2.7% in the third quarter. The 
weaknesses in growth are driven by both the on-going difficult pandemic situation (with the 
number  of  COVID-19  cases  rising  and  a  relatively  low  vaccination  rate  of  33%  by  late 
January  2022),  the  impact  on  confidence  from  escalating  tensions,  and  by  constraining 
structural  factors,  including  a  chronically  low  investment  rate.  Among  the  significant 
structural  obstacles  to  investment,  the  still  wide-spread  corruption  and  the  unfinished 
governance  reform  of  the  dense  network  of  state-owned  enterprises  remain  priorities  for 
future policy efforts. 

Taking  into  account  the  growing  money  supply  and  the  accelerating  inflation,  the  National 
Bank  of  Ukraine  (NBU)  increased  its  key  policy  rate  by  400  basis  points  to  10%  between 
June 2021 and January 2022. After significant disinflation in the first half of 2020, inflation 
had started accelerating again in November 2020. The average increase in consumer goods’ 
prices  reached  11%  in  September  2021,  before  moderating  to  10%  in  December.  The 
acceleration in producer goods’ price inflation is still ongoing, the rate having amounted to a 
spectacular 62.2% in December 2021. While the NBU considers that the peak in inflation has 
been reached, further monetary tightening is to be expected in the course of 2022, especially 
to rein inflation in to the 4% to 6% target. In the current context of a gradual global tightening 
of  financing  conditions,  and  as  an  emerging  market,  Ukraine  is  also  exposed  to  additional 
fragility stemming from a re-assessment of global risks.  

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On the back of return to growth and higher tax revenues, the 2021 public deficit is estimated 
at 3.1% of Gross Domestic Product, which is 200 basis points lower than the initially planned 
deficit.  Public  revenues  rose  by  24%  in  2021,  which  is  2.8  percentage  points  higher  than 
planned, while spending increased by 11%, which is 1.5 percentage points below the target. In 
light of these results, public finances performed well last year. The 2022 budgetary deficit is 
currently planned at 3.5% of Gross Domestic Product, but the actual turnout is very uncertain, 
can prove dramatically worse, and will notably depend on how the international geopolitical 
context evolves.   

Following the resumption of economic growth, the significant 2020 current-account surplus, 
reflecting  demand  compression,  turned  into  a  deficit  in  2021.  After  a  surplus  of  USD  5.3 
billion in 2020, the current account registered a deficit of USD 830 million, or 0.5% of  Gross 
Domestic  Product,  in  the  period  January-August  2021.  Over  the  same  period,  exports  and 
imports of goods rose by respectively 36% and 30% year-on-year, resulting in a merchandise 
trade deficit of USD 3 billion. The services balance, where exports and imports increased by 
respectively 12% and 21%, showed a surplus of USD 2.3 billion. Primary income turned into 
a significant deficit of USD 3 billion, as opposed to a surplus of USD 3.2 billion in January-
August  2020,  despite  remittances  surging  by  18%  to  USD  8.9  billion.  The  stock  of  foreign 
direct  investment  also  recovered  significantly  in  the  first  half  of  2021,  notably  due  to  the 
reinvestment of earnings.   

The  stock  of  official  foreign  exchange  reserves  proved  stable  throughout  the  pandemic  in 
2020  and  even  reached  an  all-time  high  of  USD  31.6  billion  in  August  2021,  including  the 
additional allocation of Special Drawing Rights  by the  IMF  for the equivalent of USD 2.73 
billion. Despite a minor decline in September 2021, reserves continued to grow and remained 
close to USD 31 billion in December of last year, which is still 6% higher than a year earlier. 
However,  following  the  recent  change  in  investors’  confidence  and  the  ensuring  central 
bank’s  interventions  in  the  foreign  exchange  market  for  more  than  USD  700  million  in  the 
start of 2022, official reserves are expected to have declined.  

• 

Consistency with existing policy provisions in the policy area 

Decision  No  701/2020/EU  on  providing  previous  macro-financial  assistance  to  Ukraine  (as 
part of the MFA package to  the  enlargement and neighbourhood countries in  the  context of 
the  COVID-19  pandemic)  in  the  amount  of  EUR  1.2  billion  in  loans  was  adopted  by  the 
European  Parliament  and  the  Council  on  25  May  2020.  The  assistance  was  fully  disbursed 
during 2020-2021. 

• 

Consistency with other Union policies 

in 

in  Ukraine  and,  more  broadly,  resilience 

The proposed MFA  is  in  line with the objectives  of the European Neighbourhood Policy.  It 
contributes  to  support  the  European  Union’s  objectives  of  economic  stability  and 
development 
the  Eastern  European 
neighbourhood.  By  supporting  the  authorities’  efforts  to  establish  a  stable  macroeconomic 
framework and implement ambitious structural reforms, the proposed operation enhances the 
added value of the overall EU involvement in Ukraine and improves the effectiveness of other 
forms  of  EU  financial  assistance  to  the  country,  including  budget  support  operations  and 
grants available through external financial instruments under the current multiannual financial 
framework  for  2021-2027.  The  proposed  emergency  MFA  is  part  of  an  EU  package 
containing also a grant element, through the additional deployment of EUR 120 million under 
the  “Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global 
Europe”  (NDICI-Global  Europe),  and  is  an  integral  part  of  overall  international  support  for 
Ukraine. MFA will continue to complement the assistance provided by other multilateral and 
bilateral donors. 

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These efforts should be seen against the important economic ties Ukraine has established with 
the EU. On 1 September 2017, the EU-Ukraine Association Agreement came into force. The 
provisions concerning the Deep and Comprehensive Free Trade Area had been provisionally 
applied  since  1  January  2016,  when  the  EU  and  Ukraine  started  to  mutually  open  their 
markets  for  goods  and  services.  The  EU  is  Ukraine's  first  trading  partner,  accounting  for 
38.1%  (in  value  terms)  of  Ukraine's  total  external  trade  turnover  in  2020.  EU  countries 
account  persistently  for  one  third  of  the  Ukrainian  exports  of  goods  and  services.  Imports 
from EU countries have been growing even more and reached 43.3% of all imports in 2020.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis for this proposal is Article 212 TFEU.  

• 

Subsidiarity (for non-exclusive competence)  

The subsidiarity principle is respected as the objectives of restoring macro-financial stability 
in the short-term in Ukraine cannot be sufficiently achieved by the Member States alone and 
can be better achieved by the European Union. The main reasons are the budgetary constraints 
faced at the national level and the need for strong donor coordination in order to maximise the 
scale and effectivenes of the assistance.  

• 

Proportionality 

The  proposal  complies  with  the  proportionality  principle:  it  confines  itself  to  the  minimum 
required  in  order  to  achieve  the  objectives  of  strengthening  macro-financial  stability  in  the 
short-term and does not go beyond what is necessary for that purpose.  

As  identified  by  the  Commission  based  on  the  estimates  of  the  IMF  in  the  context  of  the 
current Stand-by Arrangement, the amount of the proposed new MFA corresponds to close to 
half  of  the  estimated  residual  financing  gap  for  2022,  whilst  noting  that  this  gap  was 
calculated  prior  to  the  recent  deterioration  of  the  crisis.  This  proportion  is  consistent  with 
standard practices on burden-sharing for MFA operations (for a country with an Association 
Agreement, the upper limit would be 60% according to the ECOFIN Council conclusions of 8 
October  2002),  taking  into  account  the  assistance  pledged  to  Ukraine  by  other  bilateral  and 
multilateral donors.   

• 

Choice of the instrument 

Project  finance  or  technical  assistance  would  not  be  suitable  or  sufficient  to  address  the 
macroeconomic  objectives.  The  key  value  added  of  the  MFA  in  comparison  to  other  EU 
instruments would be to alleviate the external financial constraints and to help create a stable 
macroeconomic  framework,  including  by  promoting  a  sustainable  balance  of  payments  and 
budgetary situation, and an appropriate framework for structural reforms. By helping to put in 
place  an  appropriate  overall  policy  framework,  MFA  can  increase  the  effectiveness  of  the 
actions financed in Ukraine under other, more narrowly-focused EU financial instruments.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

MFA is provided as an integral part of the international support for the economic stabilisation 
of  Ukraine.  In  the  preparation  of  this  proposal  for  MFA,  the  Commission  services  have 

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consulted  with  the  IMF  and  the  World  Bank,  which  already  have  sizeable  financing 
programmes. The Commission has also been in regular contact with the Ukrainian authorities. 

• 

Collection and use of expertise 

In  line  with  the  requirements  of  the  Financial  Regulation,  in  the  context  of  the  COVID-19 
MFA package, the Commission services have carried out an Operational Assessment (OA) of 
the financial and administrative circuits of Ukraine in order to ascertain that the procedures in 
place  for  the  management  of  programme  assistance,  including  MFA,  provide  adequate 
guarantees. This Operational Assessment drew on the findings of the 2018 OA, which could 
be considered broadly up to date, and the thorough analysis of the 2019 Public Expenditure 
and Financial Accountability Performance Assessment report. The assessment concludes that 
the  financial  circuits  and  procedures  in  Ukraine  are  found  to  be  based  and  work  on  sound 
principles  and  are  therefore  deemed  appropriate  for  the  purposes  of  Macro-Financial 
Assistance. Developments in this area will continue to be closely monitored also through the 
regular progress reports on PFM reforms produced by the EU Delegation in Kyiv.  

• 

Impact assessment 

The  EU’s  macro-financial  assistance  is  an  exceptional  emergency  instrument  aimed  at 
addressing  severe  balance-of-payment  difficulties  in  third  countries.  Therefore,  this  MFA 
proposal is exempted from the requirement to carry out an Impact Assessment in accordance 
with  the  Commission's  Better  Regulation  Guidelines  (SWD(2015)  111  final)  as  there  is  a 
political imperative to move ahead quickly in a situation requiring a rapid response.  

More  generally,  the  Commission's  MFA  proposals  build  on  lessons  learned  from  ex-post 
evaluations carried out on past operations in the EU's neighbourhood. The new MFA, and the 
economic adjustment and reform programme attached to it, will help alleviate the short-term 
financing  needs  of  Ukraine.  The  attached  policy  measures  aimed  at  strengthening  the 
medium-term balance of payments  position and fiscal sustainability will raise resilience and 
contribute  to  a  more  sustainable  growth  model,  thus  complementing  the  current  IMF 
programme.  The  policy  conditions  should  build  upon  the  achievements  of  the  five  MFA 
programmes since 2015, including the latest COVID-19 emergency MFA assistance. Possible 
areas  of  conditionality  could,  in  principle,  include  reforms  to  strengthen  the  fight  against 
corruption, the independence of the judicial system, the governance of state-owned enterprises 
and the energy sector. 

• 

Fundamental rights 

Countries  that  are  covered  by  the  ENP  are  eligible  for  MFA.  A  pre-condition  for  granting 
MFA is that the eligible country respects effective democratic mechanisms, including a multi-
party parliamentary system and the rule of law, and guarantees respect for human rights.  

The  renewed  reform-commitment  and  strong  political  will  by  the  Ukrainian  authorities,  in 
particular  as  evidenced  by  the  successful  completion  of  the  structural  policy  conditionality 
attached to the last and fifth COVID-19 MFA programme to Ukraine, in key areas including 
the  judiciary,  good  governance,  the  rule  of  law  and  the  fight  against  corruption,  is  a  clear 
positive sign. The authorities are committed to pursue these reforms in a transparent manner 
and in line with EU standards. To that end, the political pre-condition for an MFA operation is 
considered to be satisfied. 

4. 

BUDGETARY IMPLICATIONS 

The proposed EUR 1.2 billion MFA operation for Ukraine is foreseen to be disbursed in two 
equal tranches to be released within 12 months. These funds will be borrowed in the capital 

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market  and  onlend  to  Ukraine.  The  loan  will  be  backed  by  the  External  Action  Guarantee.  
The required provisioning  (at a rate of 9% of the  amount of the loan) is  provided under the 
Neighbourhood, Development and International Cooperation Instrument (NDICI), for a total 
amount of EUR 108 million (budget line 14 02 01 70 “NDICI – Provisioning of the Common 
Provisioning Fund”).  

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The European Union shall make the MFA available to Ukraine for a total amount of EUR 1.2 
billion, provided in the form of medium- to long-term loans. This assistance will contribute to 
covering  the  residual  financing  needs  of  Ukraine  in  2022.  The  assistance  is  planned  to  be 
disbursed in two equal instalments. The release of the first tranche would occur swiftly after 
the  approval  of  this  proposal  and  the  entry  into  force  of  the  corresponding  MoU.  The 
disbursement  of  the  second  tranche  is  conditional  upon  the  successful  and  timely 
implementation  of  structural  policy  measures,  to  which  the  Ukrainian  authorities  would 
commit.  

The assistance will be managed by the Commission. Specific provisions on the prevention of 
fraud and other irregularities, consistent with the Financial Regulation, are applicable.  

The  Commission  and  the  Ukrainian  authorities  would  agree  on  a  Memorandum  of 
Understanding setting out the structural reform measures associated with the proposed MFA 
operation, including aspects of timing and sequencing. Moreover, as is normally the case with 
MFA,  the  disbursements  would  inter  alia  be  conditional  on  the  continuous  successful 
implementation of an IMF programme, as well as progress on the implementation of the EU-
Ukraine  Association  Agreement  and  the  Deep  and  Comprehensive  Free  Trade  Area.  The 
Commission will work closely with the authorities to monitor progress on the policy actions 
and the pre-conditions, as specified above.  

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2022/0026 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on providing macro-financial assistance to Ukraine 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 212 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Relations between the European Union ('the Union') and Ukraine continue to develop 
within  the  framework  of  the  European  Neighbourhood  Policy  and  the  Eastern 
Partnership.  An Association  Agreement between the Union and Ukraine,  including a 
Deep  and  Comprehensive  Free  Trade  Area  (DCFTA),  entered  into  force  on  1 
September 2017. 

Since spring 2014, Ukraine has embarked on an ambitious reform programme aiming 
to stabilise its economy and improve 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 implementation of these reforms has been supported by 
five  consecutive  Macro-financial  Assistance  programmes,  under  which  Ukraine  has 
received  assistance  loans  for  a  total  of  EUR  5  billion.  The  latest,  COVID-19 
emergency,  MFA1,  provided  EUR  1.2  billion  of  loans  and  was  completed  in 
September 2021. 

The  economy  of  Ukraine  has  been  affected  by  the  2020  recession  caused  by  the 
COVID-19 pandemic and by prolonged security threats at its border with Russia. The 
continuous build-up in uncertainty has resulted in a recent loss of confidence, affecting 
the  economic  outlook  negatively,  and  in  the  loss  of  access  to  international  capital 
markets  since  mid-January  2022.  The  strongly  deteriorating  financing  conditions 
contribute  to  a  sizable  and  increasing  residual  external  financing  gap  and  weigh 
heavily  on  investment,  thereby  weakening  the  resilience  to  future  economic  and 
political shocks.   

(4) 

The Ukrainian government has demonstrated a strong commitment to further reforms, 
with  a  short-term  focus  at  the  current  critical  juncture  on  key  policy  areas  such  as 
economic resilience and stability, governance and rule of law, and energy. 

(5)  With  renewed  reform-commitment  and  strong  political  will,  the  authorities  have 
accelerated reform implementation since the summer of 2021, which has also allowed 

1 

Decision (EU) 2020/701 of the European Parliament and of the Council of 25 May 2020 on providing 
macro‐financial assistance to enlargement and neighbourhood partners in the context of the COVID‐19 
pandemic, OJ L 165, 27.5.2020, p. 31–37 

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(6) 

(7) 

(8) 

(9) 

Ukraine to successfully complete the COVID-19 MFA operation, as all reform actions 
agreed with the Union in the Memorandum of Understanding had been fulfilled.  

To  allow  for  more  policy  flexibility  in  the  Covid19-related  crisis  context,  the 
International  Monetary  Fund  (‘IMF’)  approved  in  June  2020  an  18-month  Stand-by 
Arrangement  with  Ukraine  for  the  equivalent  of  USD  5  billion.  The  agreed-upon 
policies  focus  on  four  priorities:  (i)  mitigating  the  economic  impact  of  the  crisis, 
including  by  supporting  households  and  businesses;  (ii)  ensuring  continued  central 
bank independence and  a flexible exchange  rate; (iii) safeguarding  financial stability 
while recovering the  costs from  bank resolutions;  and (iv) moving forward with  key 
governance and anti-corruption measures to preserve and deepen recent gains. Due to 
an uneven implementation  record, the first  programme review, which also agreed on 
an extension of the programme until end-June 2022, was only concluded in November 
2021. This brought the total of disbursements under the current IMF programme to the 
equivalent of USD 2.8 billion thus far. Two more reviews are planned by the end of 
the second quarter of 2022.  

In  view  of  high  budget  financing  risks,  in  the  context  of  a  slow  recovery  from  the 
COVID-19  recession  and  quickly  accelerating  inflation,  Ukraine  requested  a  new 
long-term  macro-financial  assistance  programme  for  up  to  EUR  2.5  billion  from  the 
Union  on  16  November  2021.  However,  this  emergency  operation  is,  in  particular, 
responding to the sharp and unexpected increase in the external financing needs of the 
country,  triggered  by  the  de  facto  loss  of  access  to  financial  markets,  and  to  the 
underlying immediate challenges. 

Given  that  Ukraine  is  a  country  covered  by  the  European  Neighbourhood  Policy,  it 
should  be  considered  to  be  eligible  to  receive  macro-financial  assistance  from  the 
Union.  

The Union’s macro-financial assistance should be an exceptional financial instrument 
of untied and undesignated balance-of-payments support, which aims at addressing the 
beneficiary’s 
the 
implementation  of  a  policy  programme  containing  strong  immediate  adjustment  and 
structural  reform  measures  designed  to  improve  the  balance-of-payments  position  in 
the short term and economic resilience in the medium term. 

immediate  external  financing  needs  and  should  underpin 

(10)  Given that the loss of market access and the capital outflow have created a significant 
residual external  financing gap in  Ukraine's balance of payments over and above the 
resources  provided  by  the  IMF  and  other  multilateral  institutions,  the  Union 
emergency macro-financial assistance to be provided to Ukraine swiftly is, under the 
current exceptional circumstances, considered to be an appropriate short-term response 
to  the  sizeable  risks  to  the  country.  The  Union's  macro-financial  assistance  would 
support the economic stabilisation  and  aim at  strengthening  the immediate resilience 
of the country, as well as and where so is feasible at present, strengthen the structural 
reform  agenda  of  Ukraine,  supplementing  resources  made  available  under  the  IMF's 
financial arrangement.  

(11)  The  Union's  macro-financial  assistance  should  aim  to  support  the  restoration  of  a 
sustainable  external  financing  situation  for  Ukraine,  thereby  supporting  its  economic 
and social development. 

(12)  The  Union’s  macro-financial  assistance  is  expected  to  go  hand-in-hand  with  the 
the 
implementation  of  disbursements  of  budget  support  operations  under 

EN 

8 

  EN 

Neighbourhood,  Development  and  International  Cooperation  Instrument  established 
by Regulation (EU) 2021/947 of the European Parliament and of the Council2. 

(13)  The determination of the amount of the Union's macro-financial assistance is based on 
a quantitative assessment of Ukraine's residual external financing needs, and takes into 
account  its  capacity  to  finance  itself  with  its  own  resources,  in  particular  the 
international  reserves  at  its  disposal.  The  Union's  macro-financial  assistance  should 
complement the programmes and resources provided by the IMF and the World Bank. 
The  determination  of  the  amount  of  the  assistance  also  takes  into  account  expected 
financial  contributions  from  multilateral  donors  and  the  need  to  ensure  fair  burden 
sharing between the Union and other donors, as well as the pre-existing deployment of 
the Union's other external financing instruments in Ukraine and the added value of the 
overall Union involvement.   

(14)  The Commission should ensure that the Union's macro-financial assistance is  legally 
and substantially in line with the key principles, objectives and measures taken within 
the different areas of external action and other relevant Union policies. 

(15)  The  Union's  macro-financial  assistance  should  support  the  Union's  external  policy 
towards Ukraine. The Commission  and the European External Action Service should 
work closely together throughout the macro-financial assistance operation in order to 
coordinate, and to ensure the consistency of, Union external policy. 

(16)  The  Union's  macro-financial  assistance  should  support  Ukraine's  commitment  to 
values shared with the Union, including democracy, the rule of law, good governance, 
respect for human rights, sustainable development and poverty reduction, as well as its 
commitment to the principles of open, rules-based and fair trade. 

(17)  A  pre-condition  for  granting  the  Union's  macro-financial  assistance  should  be  that 
Ukraine  respects  effective  democratic  mechanisms  –  including  a  multi-party 
parliamentary system – and the rule of law, and guarantees respect for human rights. 
In  addition,  the  specific  objectives  of  the  Union's  macro-financial  assistance  should 
strengthen  the  efficiency,  transparency  and  accountability  of  the  public  finance 
management systems and promote structural reforms aimed at supporting sustainable 
and inclusive growth,  decent  employment creation and fiscal  consolidation.  Both  the 
fulfilment  of  the  preconditions  and  the  achievement  of  those  objectives  should  be 
regularly monitored by the Commission and the European External Action Service. 

(18) 

In  order  to  ensure  that  the  Union’s  financial  interests  linked  to  the  Union’s  macro-
financial  assistance  are  protected  efficiently,  Ukraine  should  take  appropriate 
measures  relating  to  the  prevention  of,  and  fight  against,  fraud,  corruption  and  any 
other irregularities linked to the assistance. In addition, provision should be made for 
the Commission to carry out checks and for the Court of Auditors to carry out audits. 

(19)  Release of the Union's macro-financial assistance is without prejudice to the powers of 

the European Parliament and the Council as budgetary authority.  

(20)  The  amounts  of  provisioning  required  for  macro-financial  assistance  should  be 
consistent with the budgetary appropriations provided for in the multiannual financial 
framework. 

2 

Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing 
the  Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe, 
amending  and  repealing  Decision  No  466/2014/EU  and  repealing  Regulation  (EU)  2017/1601  and 
Council Regulation (EC, Euratom) No 480/2009 (OJ  L 209, 14.6.2021, p. 1) 

EN 

9 

  EN 

                                                 
(21)  The  Union's  macro-financial  assistance  should  be  managed  by  the  Commission.  In 
order  to  ensure  that  the  European  Parliament  and  the  Council  are  able  to  follow  the 
implementation  of  this  Decision,  the  Commission  should  regularly  inform  them  of 
developments relating to the assistance and provide them with relevant documents. 

(22) 

In  order  to  ensure  uniform  conditions  for  the  implementation  of  this  Decision, 
implementing powers should be conferred on the Commission. Those powers should 
be  exercised  in  accordance  with  Regulation  (EU)  No 182/2011  of  the  European 
Parliament and of the Council3. 

(23)  The  Union's  macro-financial  assistance  should  be  subject  to  economic  policy 
conditions,  to  be  laid  down  in  a  Memorandum  of  Understanding.  In  order  to  ensure 
uniform conditions of implementation and for reasons of efficiency, the Commission 
should  be  empowered  to  negotiate  such  conditions  with  the  Ukrainian  authorities 
under  the  supervision  of  the  committee  of  representatives  of  the  Member  States  in 
accordance  with  Regulation  (EU)  No 182/2011.  Under  that  Regulation,  the  advisory 
procedure should, as a general rule, apply in all cases other than as provided for in that 
Regulation.  Considering  the  potentially  important  impact  of  assistance  of  more  than 
EUR  90  million,  it  is  appropriate  that  the  examination  procedure  be  used  for 
operations  above  that  threshold.  Considering  the  amount  of  the  Union's  macro-
financial  assistance  to  Ukraine,  the  examination  procedure  should  apply  to  the 
adoption of the Memorandum of Understanding, and to  any reduction, suspension or 
cancellation of the assistance. 

(24)  Since  the  objective  of  this  Decision,  namely  to  provide  emergency  assistance  to 
Ukraine with the view of supporting its resilience and stability, in particular cannot be 
sufficiently achieved by the Member States but can rather, by reason of its scale and 
effects,  be  better  achieved  at  Union  level,  the  Union  may  adopt  measures,  in 
accordance  with  the  principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on 
European Union (TEU). In accordance with the principle of proportionality, as set out 
in  that  Article,  this  Decision  does  not  go  beyond  what  is  necessary  to  achieve  that 
objective. 

(25) 

In  view  of  the  urgency  entailed  by  the  exceptional  circumstances  caused  by  the 
COVID‐19 pandemic and the associated economic consequences, it was considered to 
be  appropriate  to  provide  for  an  exception  to  the  eight‐week  period  referred  to  in 
Article 4 of Protocol No 1 on the role of national Parliaments in the European Union, 
annexed to the TEU, to the Treaty on the Functioning of the European Union and to 
the Treaty establishing the European Atomic Energy Community. 

(26)  This Decision should enter into force as a matter of urgency on the date following that 

of its publication in the Official Journal of the European Union, 

HAVE ADOPTED THIS DECISION: 

1. 

3 

Article 1 

The Union shall make macro-financial assistance of a maximum amount of EUR 1.2 
billion available to  Ukraine ("the Union's macro-financial assistance"),  with  a view 
to  supporting  macro-economic  stabilisation  and  a  substantive  reform  agenda.  The 
assistance shall be provided in the form of loans. The release of the Union's macro-

Regulation  (EU)  No 182/2011  of  the  European  Parliament  and  of  the  Council  of  16 February  2011 
laying down the rules and general principles concerning mechanisms for control by Member States of 
the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13). 

EN 

10 

  EN 

                                                 
2. 

3. 

4. 

5. 

1. 

2. 

3. 

1. 

financial  assistance  is  subject  to  the  approval  of  the  Union  budget  for  the  relevant 
year by the European Parliament and the Council. The assistance shall contribute to 
covering Ukraine's balance of payments needs as identified in the IMF programme. 

In order to finance the Union's macro-financial assistance, the Commission shall be 
empowered  on  behalf  of  the  Union  to  borrow  the  necessary  funds  on  the  capital 
markets or from financial institutions and to on-lend them to Ukraine. The loans shall 
have a maximum average maturity of 15 years. 

The  release  of  the  Union's  macro-financial  assistance  shall  be  managed  by  the 
Commission in a manner consistent with the agreements or understandings reached 
between  the  International  Monetary  Fund  (‘IMF’)  and  Ukraine,  and  with  the  key 
principles and objectives of economic reforms set out in the EU-Ukraine Association 
Agreement,  including  the  DCFTA,  agreed  under  the  European  Neighbourhood 
Policy. 

The Commission shall regularly inform the European Parliament and the Council of 
including 
developments 
disbursements  thereof,  and  shall  provide  those  institutions  with  the  relevant 
documents in due time. 

the  Union's  macro-financial  assistance, 

regarding 

The  Union's  macro-financial  assistance  shall  be  made  available  for  a  period  of  one 
year,  starting  from  the  first  day  after  the  entry  into  force  of  the  Memorandum  of 
Understanding referred to in Article 3(1). 

Where the financing needs of  Ukraine decrease fundamentally during the period of 
the  disbursement  of  the  Union's  macro-financial  assistance  compared  to  the  initial 
projections,  the  Commission,  acting  in  accordance  with  the  examination  procedure 
referred  to  in  Article 7(2),  shall  reduce  the  amount  of  the  assistance  or  suspend  or 
cancel it. 

Article 2 

A  pre-condition  for  granting  the  Union's  macro-financial  assistance  shall  be  that 
Ukraine  respects  effective  democratic  mechanisms  –  including  a  multi-party 
parliamentary system – and the rule of law, and guarantees respect for human rights. 

The  Commission  and  the  European  External  Action  Service  shall  monitor  the 
fulfilment  of  this  pre-condition  throughout  the  life-cycle  of  the  Union's  macro-
financial assistance.  

Paragraphs  1  and  2  shall  be  applied  in  accordance  with  Council  Decision 
2010/427/EU4. 

Article 3 

The  Commission,  in  accordance  with  the  examination  procedure  referred  to  in 
Article 7(2), shall agree with the Ukrainian  authorities on clearly defined economic 
policy  and  financial  conditions,  focusing  on  structural  reforms  and  sound  public 
finances, to which the Union's macro-financial assistance is to be subject, to be laid 
down  in  a  Memorandum  of  Understanding  ("the  Memorandum  of  Understanding") 
which shall include a timeframe for the fulfilment of those conditions. The economic 

4 

Council  Decision  2010/427/EU  of  26 July  2010  establishing  the  organisation  and  functioning  of  the 
European External Action Service (OJ L 201, 3.8.2010, p. 30). 

EN 

11 

  EN 

                                                 
policy and financial conditions set out in the Memorandum of Understanding shall be 
consistent  with  the  agreements  or  understandings  referred  to  in  Article 1(3), 
including  the  macroeconomic  adjustment  and  structural  reform  programmes 
implemented by Ukraine with the support of the IMF.  

The  conditions  referred  to  in  paragraph  1  shall  aim,  in  particular,  at  enhancing  the 
efficiency,  transparency  and  accountability  of  the  public  finance  management 
systems in Ukraine, including for the use of the Union's macro-financial assistance. 
Progress  in  mutual  market  opening,  the  development  of  rules-based  and  fair  trade, 
and  other  priorities  in  the  context  of  the  Union's  external  policy  shall  also  be  duly 
taken into account  when designing the policy measures. Progress  in  attaining those 
objectives shall be regularly monitored by the Commission. 

The  detailed  financial  terms  of  the  Union's  macro-financial  assistance  shall  be  laid 
down in a Loan Agreement to be concluded between the Commission and Ukraine.  

The  Commission  shall  verify,  at  regular  intervals,  that  the  conditions  referred  to  in 
Article 4(3) continue to be met, including whether the economic policies of Ukraine 
are in accordance with the objectives of the Union's macro-financial assistance. For 
that  verification,  the  Commission  shall  coordinate  closely  with  the  IMF  and  the 
World Bank, and, where necessary, with the European Parliament and the Council. 

Article 4 

Subject to the conditions in paragraph 3, the Union's macro-financial assistance shall 
be made available by the Commission in two equal instalments, each of which shall 
consist of a loan. The timeline for the disbursement of each instalment shall be laid 
down in the Memorandum of Understanding referred to in Article 3.  

The amounts of the Union's macro-financial assistance provided in the form of loans 
shall be provisioned, where required, in accordance with Regulation (EU) 2021/947 
of the European Parliament and of the Council5.  

The  Commission  shall  decide  on  the  release  of  the  instalments  subject  to  the 
fulfilment of the following conditions: 

the pre-condition set out in Article 2; 

a  continuous  satisfactory  track  record  of  implementing  a  non-precautionary  IMF 
credit arrangement; 

the  satisfactory  implementation  of  the  economic  policy  and  financial  conditions 
agreed in the Memorandum of Understanding. 

The  release  of  the  second  instalment  shall  not,  in  principle,  take  place  earlier  than 
three months after the release of the first instalment.  

Where the conditions in paragraph 3 are not met, the Commission shall temporarily 
suspend  or  cancel  the  disbursement  of  the  Union's  macro-financial  assistance.  In 
such  cases,  it  shall  inform  the  European  Parliament  and  the  Council  of  the  reasons 
for that suspension or cancellation.  

Regulation (EU) 2021/947 of the European Parliament and of the Council of 9 June 2021 establishing 
the  Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe, 
amending  and  repealing  Decision  No  466/2014/EU  and  repealing  Regulation  (EU)  2017/1601  and 
Council Regulation (EC, Euratom) No 480/2009 (OJ ). 

2. 

3. 

4. 

1. 

2. 

3. 

(a) 

(b) 

(c) 

4. 

5 

EN 

12 

  EN 

 
                                                 
5. 

1. 

2. 

3. 

4. 

5. 

1. 

2. 

3. 

(a) 

(b) 

6 

The  Union's  macro-financial  assistance  shall  be  disbursed  to  the  National  Bank  of 
Ukraine.  Subject  to  the  provisions  to  be  agreed  in  the  Memorandum  of 
Understanding,  including  a  confirmation  of  residual  budgetary  financing  needs,  the 
Union  funds  may  be  transferred  to  the  Ukrainian  Ministry  of  Finance  as  the  final 
beneficiary.  

Article 5 

The  borrowing  and  lending  operations  related  to  the  Union's  macro-financial 
assistance shall be carried out in euro using the same value date and shall not involve 
the Union in the transformation of maturities, or expose it to any exchange or interest 
rate risk, or to any other commercial risk. 

Where  the  circumstances  permit,  and  if  Ukraine  so  requests,  the  Commission  may 
take the steps necessary  to  ensure that an early repayment clause is  included in  the 
loan  terms  and  conditions  and  that  it  is  matched  by  a  corresponding  clause  in  the 
terms and conditions of the borrowing operations.  

Where  circumstances  permit  an  improvement  of  the  interest  rate  of  the  loan  and  if 
Ukraine so requests, the Commission may decide to refinance all or part of its initial 
borrowings or may restructure the corresponding financial conditions. Refinancing or 
restructuring operations  shall be carried out  in  accordance  with  paragraphs  1 and 4 
and shall not have the effect of extending the maturity of the borrowings concerned 
or  of  increasing  the  amount  of  capital  outstanding  at  the  date  of  the  refinancing  or 
restructuring. 

All costs incurred by the Union which relate to the borrowing and lending operations 
under this Decision shall be borne by Ukraine. 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of 
developments in the operations referred to in paragraphs 2 and 3. 

Article 6 

The  Union's  macro-financial  assistance  shall  be  implemented  in  accordance  with 
Regulation  (EU,  Euratom)  No  1046/2018  of  the  European  Parliament  and  of  the 
Council6.  

The  implementation  of  the  Union's  macro-financial  assistance  shall  be  under  direct 
management.  

The  Loan  Agreement  and  the  Grant  Agreement  to  be  agreed  with  the  Ukrainian 
authorities shall contain provisions:  

ensuring  that  Ukraine  regularly  checks  that  financing  provided  from  the  budget  of 
the  Union  has  been  properly  used,  takes  appropriate  measures  to  prevent 
irregularities  and  fraud,  and,  if  necessary,  takes  legal  action  to  recover  any  funds 
provided under this Decision that have been misappropriated; 

ensuring the protection of the Union’s financial interests, in particular providing for 
specific measures in relation to the prevention of, and fight against, fraud, corruption 
and  any  other  irregularities  affecting  the  Union’s  macro-financial  assistance,  in 

Regulation  (EU,  Euratom)  No 1046/2018  of  the  European  Parliament  and  of  the  Council  of  18  July 
2018 on the financial rules applicable to the general budget of the Union and repealing Regulation (EC, 
Euratom) No 966/2012 (OJ L 193, 30.07.2018, p. 1). 

EN 

13 

  EN 

                                                 
accordance  with  Council  Regulation  (EC,  Euratom)  No 2988/957,  Council 
Regulation (EC, Euratom) No 2185/968, Regulation (EU, Euratom) No 883/2013 of 
the  European  Parliament  and  of  the  Council9  and,  for  those  Member  States 
participating  in  enhanced  cooperation  regarding  the  European  Public  Prosecutor’s 
Office,  Council  Regulation  (EU)  2017/193910;  notably,  to  that  end,  the  European 
Anti-Fraud Office (OLAF) shall be expressly authorised to carry out investigations, 
including in particular on-the-spot checks and inspections including digital forensic 
operations  and 
its 
representatives to carry out checks, including on-the-spot checks and inspections;  

interviews;  expressly  authorising 

the  Commission,  or 

expressly  authorising  the  Commission  and  the  Court  of  Auditors  to  perform  audits 
during  and  after  the  availability  period  of  the  Union's  macro-financial  assistance, 
including document audits and on-the-spot audits, such as operational assessments; 

ensuring  that  the  Union  is  entitled  to  early  repayment  of  the  loan  and/or  to  full 
repayment  of  the  grant  where  it  has  been  established  that,  in  relation  to  the 
management of the Union's macro-financial assistance, Ukraine has engaged in any 
act  of  fraud  or  corruption  or  any  other  illegal  activity  detrimental  to  the  financial 
interests of the Union. 

Ensuring that all costs incurred by the Union that relate to a financial assistance shall 
be borne by Ukraine. 

the 

implementation  of 

Before 
the 
Commission  shall  assess,  by  means  of  an  operational  assessment,  the  soundness  of 
Ukraine's financial arrangements, the administrative procedures, and the internal and 
external control mechanisms which are relevant to the assistance. 

the  Union's  macro-financial  assistance, 

Article 7 

The  Commission  shall  be  assisted  by  a  committee.  That  committee  shall  be  a 
committee within the meaning of Regulation (EU) No 182/2011. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

Article 8 

By  30 June  of  each  year,  the  Commission  shall submit  to  the  European  Parliament 
and to the Council a report on the implementation of this Decision in the preceding 
year, including an evaluation of that implementation. The report shall: 

(c) 

(d) 

(e) 

4. 

1. 

2. 

1. 

(a) 

examine the progress made in implementing the Union's macro-financial assistance; 

7 

8 

9 

10 

Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European 
Communities financial interests (OJ L 312, 23.12.1995, p. 1). 

Council  Regulation  (EC,  Euratom)  No 2185/96  of  11 November  1996  concerning  on-the-spot  checks 
and inspections carried out by the Commission to protect the Communities’ financial interests against 
fraud and other irregularities (OJ L 292, 15.11.1996, p. 2). 

Regulation  (EU,  Euratom)  No 883/2013  of  the  European  Parliament  and  of  the  Council  of 
11 September  2013  concerning  investigations  conducted  by  the  European  Anti-Fraud  Office  (OLAF) 
and  repealing  Regulation  (EC)  No 1073/1999  of  the  European  Parliament  and  of  the  Council  and 
Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1). 

Council  Regulation  (EU)  2017/1939  of  12  October  2017  implementing  enhanced  cooperation  on  the 
establishment of the European Public Prosecutor’s Office (‘the EPPO’) (OJ L 283, 31.10.2017, p. 1). 

EN 

14 

  EN 

                                                 
(b) 

(c) 

2. 

assess the economic situation and prospects of Ukraine, as well as progress made in 
implementing the policy measures referred to in Article 3(1); 

indicate  the  connection  between  the  economic  policy  conditions  laid  down  in  the 
Memorandum  of  Understanding,  Ukraine’s  on-going  economic  and 
fiscal 
performance  and  the  Commission’s  decisions  to  release  the  instalments  of  the 
Union's macro-financial assistance. 

Not  later  than  two  years  after  the  expiry  of  the  availability  period  referred  to  in 
Article 1(4),  the  Commission  shall  submit  to  the  European  Parliament  and  to  the 
Council  an  ex-post  evaluation  report,  assessing  the  results  and  efficiency  of  the 
completed  Union's  macro-financial  assistance  and  the  extent  to  which  it  has 
contributed to the aims of the assistance. 

Article 9 

This Decision shall enter into force on the day after its publication in the Official Journal of 
the European Union.  

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

15 

  EN 

  
 
  
 
LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Proposal  for  a  Decision  of  the  European  Parliament  and  of  the  Council  providing 
further Macro-financial assistance to the Republic of Ukraine 

1.2. 

Policy area(s) concerned in the ABM/ABB structure11  

Policy area:  Economic and Financial Affairs 

Activity: 

International economic and financial affairs 

1.3. 

Nature of the proposal/initiative  

X     The proposal/initiative relates to a new action  

  The  proposal/initiative 
project/preparatory action12  

relates 

to  a  new  action 

following  a  pilot 

  The proposal/initiative relates to the extension of an existing action  

 The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objective(s) 

1.4.1.  The  Commission's  multiannual 

strategic  objective(s) 

targeted  by 

the 

proposal/initiative  

 “A  new  boost  for  jobs,  growth  and  investment:  promoting  prosperity  beyond  the 
EU” 

1.4.2. 

Specific objective(s) 

Specific objective No 

“Promoting prosperity beyond the EU”  

ABM/ABB activity(ies) concerned 

The DG ECFIN related activities pertain to:  

(a)  Supporting macro-financial stability and promoting growth-enhancing reforms 
outside the EU, including through regular economic dialogues with key partners and 
by providing macro-financial assistance; and  

(b)  Supporting  the  enlargement  process  and  the  implementation  of  the  EU 
enlargement  and  neighbourhood  policies  and  other  EU  priorities  in  partners  by 
conducting economic analysis and providing policy assessments and advice. 

1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

 

Contribute to covering the external financing needs of Ukraine in the context of 
a significant  deterioration of their external  accounts  brought  about  by the on-
going  COVID-19  pandemic  and  the  confidence  impact  of  the  geopolitical 
tensions at its borders.  

11 
12 

ABM: activity-based management; ABB: activity-based budgeting. 
As referred to in Article 54(2)(a) or (b) of the Financial Regulation. 

EN 

16 

  EN 

 
                                                 
 

 

 

Alleviate the partner’s budgetary financing needs. 

Support the fiscal consolidation effort and external stabilisation in the context 
of an IMF programme. 

Support  structural  reforms  aimed  at  improving  the  overall  macroeconomic 
management,  strengthening  economic  governance  and  transparency,  and 
improving conditions for sustainable growth. 

1.4.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

The authorities of Ukraine will be required to report on a set of economic indicators 
to the Commission services on a regular basis and,  provide a comprehensive report 
on the compliance with the agreed policy conditions ahead of the disbursement of the 
instalments of the assistance.  

The  Commission  services  will  continue  to  monitor  public  finance  management, 
following  the  operational  assessment  of  the  financial  circuits  and  administrative 
procedures  in  Ukraine,  that  was  delivered  in  June  2020.  The  EU  Delegation  in  the 
partners will also provide regular reporting on issues relevant for the monitoring of 
the assistance. The Commission services will remain in close contact  with the IMF 
and  the  World  Bank  to  benefit  from  their  insights  from  their  on-going  activities  in 
the respective partner.  

An  MFA  annual  report  to  the  Council  and  European  Parliament  is  foreseen  in  the 
proposed legislative decision, including an assessment of the implementation of this 
operation.  An  independent  ex-post  evaluation  of  the  assistance  will  be  carried  out 
within two years after the expiry of the implementation period. 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

The  disbursement  of  the  assistance  will  be  conditional  on  the  fulfilment  of  the 
political pre-conditions and conditional on the continuous successful implementation 
of  an  IMF  programme.  The  current  IMF  programme,  which  was  approved  by  the 
Board on 9 June 2020, following the implementation by the Ukrainen authorities of a 
number  of  prior  actions,  was  extended  on  21  November  2021  until  end-June  2022, 
following the successful conclusion of the first  programme review.  In addition,  the 
Commission shall agree with the authorities of Ukraine on specific policy conditions, 
listed in a Memorandum of Understanding.  

The assistance is planned to be disbursed in two instalments. The disbursement of the 
first instalment is expected to take place upon entry into force of the Memorandum 
of  Understanding,  possibly  still  in  the  first  quarter  of  2022.  The  second  instalment 
could  be  disbursed  within  a  year  of  the  entry  into  force  of  the  Memorandum  of 
Understanding. 

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1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

The instrument of macro-financial assistance is a policy-based instrument directed to 
alleviate short- and medium-term external financial needs. Given the loss of access to 
the  international  capital  markets,  the  instrument  provides  essential  financing  to  the 
widening  residual  financing  gap  of  the  country.  The  MFA  will  complement  the 
resources  made  available  by  the  international  financial  institutions,  bilateral  donors 
and  other  EU  financial  institutions.  In  doing  so,  it  will  contribute  to  the  overall 
effectiveness  of  the  financial  support  provided  by  the  international  community,  as 
well as of other EU financial assistance, including budgetary support operations. 

Furthermore, by providing long-term financing in highly concessional terms, usually 
lower  than  the  rest  of  international  or  bilateral  donors,  the  MFA  programme  is 
expected to help the government to execute its budget without fiscal deviations and 
to contribute to debt sustainability. 

In  addition  to  the  financial  impact  of  the  MFA,  the  proposed  programme  will 
strengthen the governments’ reform commitment and their aspiration towards closer 
relations  with  the  EU,  as  reflected  by  the  Association  Agreement  that  entered  into 
force  in  2017.  This  result  will  be  achieved,  inter  alia,  through  appropriate 
conditionality  for  the  disbursement  of  the  assistance.  In  a  larger  context,  the 
programme  will  signal  that  the  EU  is  ready  to  support  partners  in  the  Eastern 
neighbourhood, including Ukraine, in moments of economic difficulties.  

1.5.3.  Lessons learned from similar experiences in the past 

Macro-financial  assistance  operations  in  partners  are  subject  to  ex-post  evaluation. 
Evaluations  conducted  thus  far  (on  completed  MFA  programmes),  conclude  that 
MFA  operations  do  contribute,  albeit  sometimes  modestly  and  indirectly,  to  the 
improvement  of  the  external  sustainability,  the  macroeconomic  stability  and  the 
achievement of structural reforms in the partner. In most cases, MFA operations had 
a positive effect on the balance of payments of the partner and helped to relax their 
budgetary constraints. They also led to somewhat higher economic growth. 

The  last  evaluation  carried  out  for  an  MFA  operation  to  Ukraine  refers  to  the 
intervention implemented between 2015 and 2018 (MFA III). The evaluation found 
that  MFA  III  was  highly  relevant  in  terms  of  its objectives,  financial  envelope  and 
policy  conditions.  The  operation  effectively  supported 
the  country’s  fiscal 
consolidation and helped Ukraine to improve its balance-of-payments position. MFA 
III  conditionality  created  a  politically  reinforcing  effect  that  contributed  to  the 
mobilisation of Ukrainian authorities around crucial reforms (namely: public finance 
management;  energy  sector;  governance  and  transparency;  financial  sector).  The 
programme  also  added  value  through  its  confidence-boosting  effect  on  the  private 
sector. 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

Compatibility with the Multiannual Financial Framework 

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In the 2021-2027 multiannual financial framework, the provisioining of MFA loans 
will  be  covered  by  the  total  amount  foreseen  to  provision  the  External  Action 
Guarantee  within  the  NDICI  -  Global  Europe.  The  (indicative)  lending  capacity 
foreseen  for  MFA  is  sufficient  to  cover  this  operation  as  well  as  other  MFA 
operations being implemented. 

Possible synergies with other appropriate instruments 

The EU is among the major donors to Ukraine, supporting their economic, structural 
and  institutional  reforms  as  well  as  civil  society.  EU  financial  support  to  Ukraine 
over 2015-2021 through Macro-financial Assistance programmes amounted to EUR 
5  billion.  This  MFA  programme  complements  other  EU  external  actions  or 
instruments used to support Ukraine. It is also aligned with the new Global Europe 
instrument (Neighbourhood, Development and International Cooperation instrument) 
and the instrument for Pre-accession assistance (IPA-III) for 2021-2027.  

The key value added of the MFA in comparison to other EU instruments would be to 
help  create  a  stable  macroeconomic  framework,  including  by  promoting  a  more 
sustainable  balance-of-payments  and  budgetary  situation,  and  an  appropriate 
framework for advancing structural reforms. MFA does not provide regular financial 
support and is to be discontinued as soon as the partner’s external financial situation 
has been brought back onto a sustainable path.  

MFA would also  be complementary to  interventions envisaged by the international 
community,  in  particular  the  adjustment  and  reform  programmes  supported  by  the 
IMF and the World Bank. 

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

By  using  loans,  this  MFA  operation  increases  the  effectiveness  of  the  EU  budget 
through the leverage effect and provides for the best cost-efficient option.  

The  Commission  is  empowered  to  borrow  funds  from  capital  markets  on  behalf  of 
both  the  European  Union  and  Euratom  using  the  guarantee  of  the  EU  budget.  The 
aim is to obtain funds from the market at the best available rates due to the top credit 
status  (AAA-rated  by  Fitch,  Moody's  and  DBRS,  AA  by  S&P,  all  with  stable 
outlook)  of  the  EU/Euratom  and  then  on-lend  them  to  eligible  borrowers  in  the 
context of lending under the EFSM, BoP, MFA and to Euratom projects. Borrowing 
and  lending  is  conducted  as  a  back-to-back  operation,  ensuring  that  the  EU  budget 
does not take any interest rate or foreign exchange risk. The target of obtaining funds 
at  the  best  available  rates  for  borrowing  and  lending  activities  has  been  achieved 
because those rates are in line with peer institutions (EIB, EFSM, and ESM). 

EN 

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1.6. 

Duration and financial impact of the proposal/initiative 

X limited duration  

–    in effect during a 12 month period starting in 2022  

–    Financial impact from 2022 to 2023 for commitment appropriations and from 

2022 to 2023 for payment appropriations.  

1.7.  Management mode(s) planned13  

X Direct management by the Commission 

–  X by its departments, including by its staff in the Union delegations;  

–    by the executive agencies  

 Shared management with the Member States  

 Indirect management by entrusting budget implementation tasks to: 

–   third countries or the bodies they have designated; 

–   international organisations and their agencies (to be specified); 

–   the EIB and the European Investment Fund; 

–   bodies referred to in Articles 70 and 71 of the Financial Regulation; 

–   public law bodies; 

–   bodies governed by private law with a public service mission to the extent that 

they are provided with adequate financial guarantees; 

–   bodies governed by the private law of a Member State that are entrusted with 
the  implementation  of  a  public-private  partnership  and  that  are  provided  with 
adequate financial guarantees; 

–    persons  entrusted  with  the  implementation  of  specific  actions  in  the  CFSP 

pursuant to Title V of the TEU, and identified in the relevant basic act. 

– 

If more than one management mode is indicated, please provide details in the ‘Comments’ section. 

Comments  

13 

Details of management modes and references to the Financial Regulation may be found on the 
BudgWeb site: 
https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx  

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2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

The  actions  to  be  financed  under  this  Decision  will  be  implemented  under  direct 
management  by  the  Commission  from  headquarters  and  with  support  of  the  Union 
delegations.  

This assistance is of macroeconomic nature and its design is consistent with an IMF-
supported programme. The monitoring of the action by the Commission services will 
take place on the basis of the continuous successful implementation of both an IMF 
programme  and  the  specific  reform  measures  to  be  agreed  with  the  Ukrainian 
authorities  in  a  Memorandum  of  Understanding  with  a  frequency  that  is  consistent 
with the number of instalments (See also point 1.4.4). 

2.2.  Management and control system(s)  

2.2.1. 

Justification of the management mode(s), the funding implementation mechanism(s), 
the payment modalities and the control strategy proposed 

The  actions  to  be  financed  under  this  Decision  will  be  implemented  under  direct 
management  by  the  Commission  from  headquarters  and  with  support  of  the  Union 
delegations.  

MFA disbursements are dependent on successful reviews, and tied to the fulfilment 
of  conditionality  attached  to  each  operation.  The  implementation  of  conditions  is 
closely  monitored  by  the  Commission,  in  close  coordination  with  the  Union 
Delegations. 

2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

Risks identified 

There  are  fiduciary,  policy  and  political  risks  related  to  the  proposed  MFA 
operations.  

There  is  a  risk  that  the  MFA  could  be  used  in  a  fraudulent  way.  As  MFA  is  not 
designated to specific expenses (contrary to project financing, for example), this risk 
is  related  to  factors  such  as  the  general  quality  of  management  systems  in  the 
National  Bank  of  Ukraine  and  the  Ministry  of  Finance,  administrative  procedures, 
control and oversight functions, the security of IT systems and the appropriateness of 
internal and external audit capabilities. 

A second risk stems from the possibility that Ukraine will fail to service the financial 
liabilities towards the EU stemming from the proposed MFA loans (default or credit 
risk), which could be caused for example by a significant additional deterioration of 
the balance of payments and fiscal position of the partner. 

Another  key  risk  to  the  operation  stems  from  worsening  tensions  between  Ukraine 
and  Russia,  which  could  have  a 
impact  on  Ukraine’s 
macroeconomic stability, affecting the performance of the  IMF programme and the 
disbursement and/or repayment of the proposed MFA. 

further  negative 

Internal control systems 

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21 

  EN 

The  macro-financial  assistance  will  be  liable  to  verification,  control  and  auditing 
procedures under the responsibility of the Commission, including the European Anti-
Fraud Office (OLAF), and by the European Court of Auditors as foreseen by Article 
129 of the Financial Regulation 

Ex-ante:  Commission  assessment  of  management  and  control  system  in  the 
beneficiary country. For each beneficiary country, an ex-ante operational assessment 
of the financial circuits and control environment is carried out by the Commission, if 
necessary,  with  technical  support  from  consultants.  An  analysis  of  accounting 
procedures, segregation of duties and internal/external audit of the Central bank and 
the Ministry of Finance are carried out to ensure a reasonable level of assurance for 
sound  financial  management.  Should  weaknesses  be  identified,  they  are  translated 
into  conditions,  which  have  to  be  implemented  before  the  disbursement  of  the 
assistance. Also, when needed, specific arrangements for payments (e.g. ring-fenced 
accounts) are put in place. 

During  implementation:  Commission  checks  of  periodic  partner  declarations.  The 
payment is subject to (1) monitoring by DG ECFIN staff, in close coordination with 
the  EU  Delegations  and  with  the  external  stakeholders,  like  the  IMF,  of  the 
implementation of the agreed conditionalities, and (2) the normal control procedure 
provided  for  by  the  financial  circuit  (model  2)  used  in  DG  ECFIN,  including  the 
verification  by  the  financial  unit  of  the  fulfilment  of  conditions  attached  to  the 
disbursement of the assistance mentioned above. The disbursement relating to MFA 
operations may be subject to additional independent ex-post (documentary and/or on-
the-spot)  verifications  by  officials  of  the  ex-post  control  team  of  the  DG.  Such 
verifications  may  also  be  initiated  at  the  request  of  the  responsible  AOSD. 
Interruptions  and  suspensions  of  payments,  financial  corrections  (implemented  by 
Commission), and recoveries may be practiced where needed (it has not occurred so 
far), and are explicitly foreseen in the financing agreements with the partners. 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio of "control 
costs ÷ value of the related funds managed"), and assessment of the expected levels 
of risk of error (at payment & at closure)  

The control systems in place, such as the ex-ante operational assessments or the ex-
post assessments, ensured an effective error rate for the MFA payments of 0%. There 
are no known  cases  of  fraud, corruption or illegal  activity. MFA operations have  a 
clear  intervention  logic,  one  that  allows  the  Commission  to  evaluate  their  impact. 
The  controls  enable  the  confirmation  of  assurance  and  of  attainment  of  policy 
objectives and priorities.  

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy. 

To mitigate the risks of fraudulent use several measures have been and will be taken:  

First,  the  Loan  Agreement  will  comprise  a  set  of  provisions  on  inspection,  fraud 
prevention, audits and recovery of funds in case of fraud or corruption. It is further 
envisaged  that  a  number  of  specific  policy  conditions  will  be  attached  to  the 
assistance,  including  in  the  area  of  public  finance  management,  with  a  view  to 
strengthening  efficiency,  transparency  and  accountability.  Also,  the  assistance  will 
be paid to a specific account of the National Bank of Ukraine.   

EN 

22 

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Moreover, in line with the requirements of the Financial Regulation, the Commission 
services  have  carried  out  an  Operational  Assessment  of  the  financial  and 
administrative  circuits  of  Ukraine  to  ascertain  that  the  procedures  in  place  for  the 
management of programme assistance, including MFA, provide adequate guarantees. 
The  assessment  was  carried  out  in  June  2020,  and  covers  areas  such  as  budget 
preparation  and  execution,  public  internal  financial  control,  internal  and  external 
audit,  public  procurement,  cash  and  public  debt  management,  as  well  as  the 
independence of the central bank. Developments in that area will be further closely 
monitored by the EU Delegations in the respective partner. The Commission is also 
using budget support assistance to help the Ukrainian authorities improve their PFM 
systems, and these efforts are strongly supported by other donors. 

Finally, the assistance will be liable to verification, control and auditing procedures 
under  the  responsibility  of  the  Commission,  including  the  European  Anti-Fraud 
Office (OLAF), and the European Court of Auditors as foreseen by Article 129 of the 
Financial Regulation. 

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3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

  Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Heading of 
multiannual 
financial 
framework 

Number  

Type of  
expenditure 

Diff./Non-
diff.14 

Contribution  

from 
EFTA 
countries
15 

from 
candidate 
countries16 

from third 
countries 

within the 
meaning of 
Article 21(2)(b) of 
the Financial 
Regulation  

14.02.01.70.06 [MFA loans – EAG] 

Diff. 

NO 

NO 

NO 

NO 

  New budget lines requested – Not applicable 

14 
15 
16 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

24 

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3.2. 

Estimated financial impact of the proposal on appropriations  

3.2.1. 

Summary of estimated impact on operational appropriations  

–    The proposal/initiative does not require the use of operational appropriations  

–  X  The proposal/initiative requires the use of operational appropriations, as explained below: 

Heading of multiannual financial  
framework  

DG: ECFIN 

 Operational appropriations  

Budget line17  

Commitments 

14.02.01.70.06 [MFA loans – EAG] 

Payments 

6 

(1a) 

(2a) 

Appropriations  of  an  administrative  nature  financed  from  the 
envelope of specific programmes19  

Budget line  
14.20.03.01 [MFA Grants] 

TOTAL appropriations 
for DG ECFIN 

Commitments 

Payments 

 TOTAL operational appropriations  

Commitments 

(3) 

=1a+1b 
+3 

=2a+2b 

+3 

(4) 

Heading 6 - 'Neighbourhood and the World'  

EUR million (to three decimal places) 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

TOTAL 

108.018 

108.0 

108.0 

108.0 

0.15 

108.0 

0.15 

108.0 

108.0 

0.15 

108.15 

17 
18 
19 

According to the official budget nomenclature. 
Amount of the provisioning for MFA loans (9%) to be paid into the Common Provisioning Fund. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

25 

EN 

 
 
 
 
 
 
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

Payments 

(5) 

(6) 

108.15 

108.15 

TOTAL appropriations  
under HEADING 6 
of the multiannual financial 
framework 

Commitments 

=4+ 6 

108.0 

0.15 

108.15 

Payments 

=5+ 6 

108.15 

108.15 

EN 

26 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
If more than one operational heading is affected by the proposal / initiative, repeat the section above: (EUR million (to three decimal places)) 

Heading of multiannual financial  
framework  

7 

Heading 7 – ‘European public administration’ 

This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative 
Financial Statement (Annex V to the internal rules), which is uploaded to DECIDE for interservice consultation purposes.  

DG: ECFIN 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

Year 

TOTAL 

Human Resource 

Other administrative expenditure 

TOTAL appropriations  
under HEADING 7 
of the multiannual financial 
framework 

0.283 

0.141 

- 

0.020 

0.283 

0.161 

- 

- 

- 

0.024 

- 

0.024 

0.283 

0.161 

- 

0.024 

Appropriatio
ns 

(Total 
commitments 
Total 
= 
payments) 

TOTAL appropriations  
under HEADINGS 1 to 7 
of the multiannual financial framework 
(Reference amount) 

Commitmen
ts 

=4+ 6 

Year 
2022 

108.28
3 

Year 
2023 

0.161 

Payments 

=5+ 6 

0.283 

0.161 

Year 

Year 
2024 

- 

- 

Year 
2025 

0.174 

108.17
4 

0.448 

0.020 

0.468 

0.468 

TOTAL 

108.618 

108.618 

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27 

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3.2.2.  Estimated output funded with operational appropriations  

Commitment appropriations in EUR million (to three decimal places) 

   Indicate 
objectives 
and outputs  

 

Year 2021 

Year 2022 

Year 2023 

Year 2024 

Year 2025 

TOTAL 

Type20 

Number  Cost  Number  Cost  Number  Cost  Number  Cost  Number  Cost 

Total 
number 

Total cost 

SPECIFIC OBJECTIVE NO 121 

- Output 1 

- Output 2 

Grant 
disbursements 
Provisioning of the 
External Action 
Guarantee 

- Output 3 

Ex-post evaluation 

Subtotal for specific objective No 1 

TOTAL COST 

2 

108.0 

- 

- 

- 

- 

2 

2 

108.0 

108.0 

- 

- 

- 

- 

1 

1 

1 

0.15 

0.15 

0.15 

2 

1 

2 

2 

108.0 

0.15 

108.15 

108.15 

20 
21 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).   
As described in point 1.4.2. ‘Specific objective(s)…’   

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EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3. 

Summary of estimated impact on administrative appropriations  

–  X  The  proposal/initiative  requires  the  use  of  appropriations  of  an 

administrative nature, as explained below: 

EUR million (to three decimal places) 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

TOTAL 

- 

- 

- 

0.024 

- 

0.024 

0.448 

0.020 

0.468 

HEADING 7 
of the multiannual 
financial framework 

Human resources  

0.283 

0.141 

- 

0.020 

0.283 

0.161 

Other administrative 
expenditure  

Subtotal HEADING 7 
of the multiannual 
financial framework  

22

Outside HEADING 7
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 7 
of the multiannual 
financial framework  

TOTAL 

0.283 

0.161 

- 

0.024 

0.468 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature  will  be  met  by 
appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the 
DG. 

22 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU programmes 
and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

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3.2.3.1.  Estimated requirements of human resources  

–  X  The proposal/initiative requires the use of human resources, as explained 

below: 

Estimate to be expressed in full time equivalent units 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

TOTAL 

 Establishment plan posts (officials and temporary staff) 

20 01 02 01 (Headquarters and Commission’s Representation 
Offices) 

1.8 

0.9 

- 

0.15 

2.85 

20 01 02 03 (Delegations) 

01 01 01 01  (Indirect research) 

 01 01 01 11 (Direct research) 

Other budget lines (specify) 

 External staff (in Full Time Equivalent unit: FTE)

23

20 02 01 (AC, END, INT from the ‘global envelope’) 

20 02 03 (AC, AL, END, INT and JPD in the delegations) 

XX 01  xx yy zz  

24

- at Headquarters 

- in Delegations  

01 01 01 02 (AC, END, INT - Indirect research) 

 01 01 01 12 (AC, END, INT - Direct research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

1.8 

0.9 

- 

0.15 

2.85 

The human resources required will be met by staff from the DG who are already assigned to management of the 
action  and/or  have  been  redeployed  within  the  DG,  together  if  necessary  with  any  additional  allocation  which 
may  be  granted  to  the  managing  DG  under  the  annual  allocation  procedure  and  in  the  light  of  budgetary 
constraints. 

Description of tasks to be carried out: 

Officials  and 
staff 

temporary 

Director  Dir.  D:  Supervise  and  manage  the  operation,  liaise  with  Council  and 
Parliament for the adoption of the Decision and the approval of the Memorandum of 
Understanding  (MoU),  negotiate  the  MoU  with  the  Ukrainian  authorities,  review 
reports, lead missions and assess progress with conditionality compliance. 

HoU/DHoU  Dir.  D:  Assist  the  Director  in  managing  the  operation,  liaising  with 
Council and Parliament for the adoption of the Decision and the approval of the MoU, 
negotiating  with  the  Ukrainian  authorities  the  MoU  and  Loan  Facility  Agreement 
(together  with  DG  BUDGET),  reviewing  reports  and  assessing  progress  with 
conditionality compliance.  

Desk economists, MFA Sector (Dir. D): Prepare the Decision and MoU, liaise with the 
authorities  and  the  IFIs,  conduct  review  missions,  prepare  Commission  staff  reports 
and  Commission  procedures  related  to  the  management  of  the  assistance,  liaise  with 
external experts for the operational assessment and the ex-post evaluation.  

DG BUDGET (Units E1, E3 under the supervision of the Director): Prepare the Loan 

23 

24 

AC=  Contract  Staff;  AL  =  Local  Staff;  END=  Seconded  National  Expert;  INT  =  agency  staff; 
JPD= Junior Professionals in Delegations.  
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines). 

EN 

30 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Facility  Agreement  (LFA),  negotiate  it  with  the  authorities  of  Ukraine  and  have  it 
approved by the responsible Commission services and signed by both parties. Follow 
up  the  entry  into  force  of  the  LFA.  Prepare  the  Commission  decision(s)  on  the 
borrowing transaction(s), follow up the submission of the Request(s) for Funds, select 
the  banks,  prepare  and  execute  the  funding  transaction(s)  and  disburse  the  funds  to 
Ukraine.  Carry  out  the  back-office  activities  to  follow  up  the  reimbursement  of  the 
loan(s). Prepare the corresponding reports on these activities. 

External staff 

- 

EN 

31 

  EN 

 
3.2.4.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–  X  can be fully financed through redeployment within the relevant heading of 

the Multiannual Financial Framework (MFF). 

3.2.5.  Third-party contributions  

The proposal/initiative: 

–  X  does not provide for co-financing by third parties 

EN 

32 

  EN 

 
3.3. 

Estimated impact on revenue  

–  X  The proposal/initiative has no financial impact on revenue. 

EN 

33 

  EN