Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL Providing exceptional macro-financial assistance to Ukraine
Date: 2022-07-01
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU aid, EU loan, European neighbourhood policy, Russia, Ukraine, economic reform, economic stabilisation, enlargement of the Union, macro-financial assistance, territorial dispute

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   EUROPEAN COMMISSION  Brussels, 1.7.2022  COM(2022) 450 final 2022/0213 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL Providing exceptional macro-financial assistance to Ukraine  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  EU’s  support  to  Ukraine  in  the  current  extraordinary  situation  is  embbeded  in  a  strong 
long-term relationship. Ukraine has been developing a strong partnership with the European 
Union  since  2014,  going  beyond  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, has been the main tool for bringing Ukraine and the EU closer together.1 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  Ukraine’s  important 
structural reforms that are crucial for attracting investments, boosting productivity and lifting 
the standards of living in the medium and longer term. Following the country’s application for 
Union  membership,  the  European  Council  recognised  the  European  perspective  of  Ukraine 
and granted candidate country status, thus cooperation with Ukraine is set to deepen further as 
the country moves forward in its European path. 

The long-term economic development and the reform orientation of Ukraine have been facing 
a  tremendous  challenge  since  Russia  invaded  the  country  on  24  February  2022  in  an 
unprecedented  act  of  unjustified  and  unprovoked  aggression.  In  addition  to  the  immense 
human suffering, the on-going war in Ukraine has caused already tremendous damage to the 
physical  infrastructure  (roads,  bridges,  factories,  etc.)  and  to  the  residential  and  communal 
buildings  (housing  units,  schools,  hospitals,  etc.).  The  fighting  has  also  caused  a  massive 
human exodus, with more than 6 million internally displaced persons and more than 7 million 
refugees. 

In  addition  to  inflicting  tremendous  damage  to  the  economy,  Russia’s  war  of  agression 
against Ukraine has caused the sovereign to  lose access  to  the international  capital  markets. 
The resulting underlying balance-of-payments funding gap is estimated by the authorities and 
the IMF to reach around USD 39 billion for the whole of 2022. In the IMF’s own assessment, 
Ukraine  could  finance,  through  a  safe  draw-down  on  its  official  international  reserves  that 
would  not  threaten  its  macro-financial  stability,  USD  9  billion  of  this  gap.2  Bilateral  and 
multilateral  commitments  of  financial  support  pledged  to  Ukraine  in  the  context  of  the  G7 
Finance Ministers and Central Bank Governors meeting on 18 to 20 May have reached almost 
USD  20  billion.  Germany  provided  a  grant  for  direct  budgetary  support  of  EUR  1  billion. 
Further commitments by EU member states include EUR 200 million by Italy and EUR 190 
million by France. In order to make a contribution toward financing the remaining estimated 
funding  gap  of  Ukraine  for  the  whole  of  2022  of  about  USD  10  billion,  the  Commission 
intends  to  present  a  proposal  for  an  exceptional  MFA  operation  of  up  to  EUR  9  billion  to 
Ukraine.  

In order to address the immediate and most urgent funding needs of Ukraine, as a first step, 
the Commission is submitting to the European Parliament and the Council this proposal for a 
decision to provide additional MFA of up to EUR 1 billion to Ukraine, in the form of a highly 

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Ukraine  applied  officially  for  EU  membership  on  28  February  2022,  four  days  after  the  Russian 
invasion, and was granted candidate country status in late June 2022. 
As confirmed by the IMF to the European Commission in an assessment letter received on 3 June 2022. 

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consessional long-term loan. As a second step, the Commission intends to present as soon as 
possible  the  remainder  of  this  highly  exceptional  package,  given  its  nature  and  size.  It 
responds  therefore  to  the  European  Council’s  call  from  23-24  June  for  a  swift  proposal. 
Together with the emergency MFA of EUR 1.2 billion disbursed earlier this year,3 the total 
macro-financial support from the EU to Ukraine since the start of the war would reach EUR 
2.2 billion and could reach up to EUR 10 billion once the whole exceptional MFA to Ukraine 
becomes  operational.4  This  financial  assistance  comes  in  addition  to  many  other  types  of 
support,  notably  humanitarian,  development  and  defence  assistance,  the  suspension  of  all 
import duties on Ukrainian exports for one year or other solidarity initiatives, e.g. to address 
transport bottlenecks so that exports, in particular of grains, could be ensured. 

This  additional  MFA,  of  up  to  EUR  1  billion,  is  seen  as  the  first  part  and  the  Commission 
intends to come forward with a proposal for the second part of the exceptional MFA as soon 
as feasible. This first part of the exceptional MFA aims to provide swift financial support in a 
situation of acute funding needs and to ensure the continued functioning of the most critical 
functions  of  the  Ukrainian  state.  It  will  have  an  availability  period  of  one  year  and  will  be 
disbursed  as  a  single  instalment,  which  may  be  split  into  one  or  more  tranches.  A 
Memorandum  of  Understanding  (henceforth  “MoU”),  to  be  agreed  with  the  Ukrainian 
authorities,  will  condition  the  release  of  the  instalment  and  the  assistance.  This  MoU  will 
include enhanced transparency and reporting on the use of funds and will define the setting-up 
of reporting requirements to which this MFA will be linked. The policy actions to improve the 
country’s resilience and stability, in the area of governance and rule of law, and in the energy 
sector  from  the  EUR  1.2  billion  emergency  MFA,  disbursed  in  March  and  May  2022,  that 
have not been completed due to reasons of force majeure, could then also be considered. The 
implementation  of  this  MFA,  as  the  first  part  of  the  announced  exceptional  MFA  in  the 
‘Ukraine  relief  and  reconstruction’  communication,  is  expected  to  go  hand-in-hand  with 
humanitarian aid and support financed by the Neighbourhood, Development and International 
Cooperation  Instrument  -  Global  Europe  (NDICI-GE).5  Moreover,  it  is  part  of  the 
extraordinary international effort by bilateral donors and international financial institutions to 
support Ukraine at this critical juncture. 

The proposed instalment of EUR 1 billion will be supported by provisions available from the 
EU  budget  for  the  External  Action  Guarantee  established  under  the  NDICI-GE.  These 
provisions  equip  the  EU  with  resources  to  repay  investors  in  bonds  that  have  been  used  to 
finance the MFA loans in  the event  that a beneficiary country fails to  honour its repayment 
commitments  to  the  EU.  The  current  MFF  foresees  a  general  MFA  programme  of 
approximately EUR 11 billion in loans, overall, which are provisioned at the rate of 9%. On 
this  basis,  EUR  1  billion  in  provisions  have  been  earmarked  in  the  financial  programming 
provisions for MFA loans to third countries under the current MFF. The provisioning should 
be  financed  within  the  limits  set  in  Article  31(5),  second  subparagraph  of  Regulation  (EU) 
2021/947.  This  provisioning  will  provide  the  budgetary  means  which  will  underpin  the 
proposed loan to Ukraine.  

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Council Implementing Decision, 28.03.22. 
Prior  to  the  extraordinary  MFA  support  since  2022,  the  EU  has  assisted  Ukraine  through  five 
consecutive  Macro-Financial  Assistance  (MFA)  operations  that  provided  EUR  5.0  billion  of  loans  in 
the period between 2014 and 2021. 
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/Union of the European Parliament and of the Council 
and repealing Regulation (EU) 2017/1601 of the European Parliament and of the Council and Council 
Regulation (EC, Euratom) No 480/2009 (Text with EEA relevance), OJ L 209, 14.6.2021, p. 1. 

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However, taking into account the recent dramatic and unforeseeable developments in Ukraine, 
the  provisioning  rate  of  9%  generally  applied  to  countries  addressing  a  balance-of-payment 
crisis is not adequate in the present instance. This proposal envisages a coverage rate of 70% 
through  paid-in  provisions  under  the  Union  budget.  This  exceptionally  high  rate  of 
provisioning  is  deemed  sufficient  to  contain  the  risk  implied  by  this  additional  MFA  to 
Ukraine, in line with the principles of sound financial management. Application of this 70% 
provisioning rate to the foreseen loan programme of up to EUR 1 billion in the form of a loan 
implies  that  an  amount  of  EUR  700  million,  already  available  under  this  MFF  for  macro-
financial assistance to third countries, will be used as a cushion against potential losses on this 
new  loan.  That  provisioning  rate  would  apply  instead  of  the  general  rule  set  out  in  Article 
31(5), third subparagraph of Regulation (EU) 2021/947. 

Recognising  the  extremely  challenging  situation  Ukraine  is  facing,  to  limit  the  impact  on 
fiscal  sustainability  from  this  loan,  it  is  also  proposed  that  the  EU  budget  exceptionally 
assumes the interest rate costs arising from the proposed macro-financial assistance of up to 
EUR 1 billion, in the form of a loan. This way, the EU will provide additional financial relief 
to  Ukraine,  which  contributes  to  improving  its  public  debt  sustainability.  The  Commission 
will arrange a loan with a long maturity in order to provide as long a period as possible for 
Ukraine to return to growth, reconstruct its economy in line with its European aspirations and 
maximise the chances of full repayment. 

Upon  adoption  of  this  proposal,  and  completion  of  all  related  formalities  (signature  of  the 
Memorandum  of  Understanding,  entry  into  force  of  the  Loan  Agreement),  the  Commission 
will  arrange  this  loan  as  a  matter  of  urgency,  reflecting  the  needs  of  Ukraine.  The 
Commission will take forward the preparations for the organisation of the remaining package 
of the exceptional MFA loans as expeditiously as possible. 

• 

General context  

The  economic  situation  of  Ukraine  has  deteriorated  dramatically  following  Russia’s  war  of 
aggression. Ukraine’s GDP is unofficially estimated to have decreased by 35-40% in March-
April year-on-year. Inflation increased to 18.0% year-on-year in May. The National Bank of 
Ukraine  (NBU)  suspended  the  inflation-targeting  framework  for  the  duration  of  the  conflict 
and kept its main refinancing rate at 10% until 3 June, when it raised it to 25% to discourage 
the  demand  for  foreign  exchange  that  started  to  build  up  in  the  second  part  of  May.  It  also 
promised to acquire government war bonds in case of insufficient private demand and actually 
purchased  the  equivalent  of  around  USD  4.1  billion  of  these  bonds.  Part  of  the  subsequent 
monetary  budget  financing  was,  however,  absorbed  by  NBU  FX  sale  interventions,  which 
account for an aggregate decline of the official international reserves by around USD 4 billion 
between late January and end-May to USD 25.1 billion. 

Russia’s  war  of  aggression  triggered  sizable  funding  needs  for  the  Ukrainian  budget  that 
reflect  into  a  substantial  external  funding  gap.  On  the  one  hand,  the  war  resulted  in  a 
significant contraction of public revenues, even though some of it is policy-driven as a relief 
measure  for  SMEs  (VAT  moratoria,  exemption  from  customs  duties).  On  the  other  hand, 
expenditure increased substantially to cover Ukraine’s exceptional military and humanitarian 
needs, including social support to the internally displaced persons and a higher wage defence 
bill. The resulting overall balance-of-payments funding gap is estimated by the authorities and 
the IMF to reach around USD 39 billion for the whole of 2022. In IMF’s assessment, Ukraine 
could finance, through a safe draw-down on its official international reserves that would not 

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threaten  its  macro-financial  stability,  USD  9  billion  of  this  gap.6  Bilateral  and  multilateral 
commitments  of  financial  support  to  Ukraine  pledged  in  the  context  of  the  G7  Finance 
Minister and Central Bank Governors meeting on 18 to 20 May have reached almost USD 20 
billion.  Germany  provided  a  grant  for  direct  budgetary  support  of  EUR  1  billion.  Further 
commitments by EU member states include EUR 200 million by Italy and EUR 190 million 
by France. In order to make a sizable contribution toward financing the remaining estimated 
funding  gap  of  Ukraine  for  the  whole  of  2022  of  about  USD  10  billion,  the  Commission 
intends, in particular as  called upon by the European Council of 23 and 24 June, to provide 
exceptional MFA of up to EUR 9 billion to Ukraine, in the form of highly concessional long-
term loans. In order to address the immediate and most urgent funding needs of Ukraine, the 
current proposal for additional MFA of up to EUR 1 billion in the form of a loan is the first 
part.  The  Commission  intends  to  come  forward  shortly  with  an  appropriate  proposal 
concerning  the  rest  of the exceptional  MFA to  Ukraine.  It aims  at  contributing to  financing 
the  most  urgent  and  immediate  funding  needs  of  Ukraine,  while  taking  into  account  the 
current  availabilities  under  the  Union’s  budget.  The  sizable  contributions  by  international 
donors to the financing of the overall balance-of-payments funding gap of Ukraine could limit 
the adverse inflationary and overall destabilizing impact that would ensure if it were financed 
in full through money printing by the NBU. 

• 

Consistency with existing policy provisions in the policy area 

This proposal for macro-financial assistance to Ukraine follows the Decision (EU) 2022/313 
on providing macro-financial assistance to Ukraine in the amount of EUR 1.2 billion in loans, 
which was fully disbursed in two tranches in March and May 2022. This additional MFA as a 
first  stage of the implementation  of the planned exceptional  MFA,  reinforces actions by the 
Union for direct humanitarian, development and defence support, as well as Union’s initatives 
to coordinate multilateral actions, such as the “Stand-up for Ukraine”. 

• 

Consistency with other Union policies 

The  provision  of  further  support  to  Ukraine  in  the  form  of  a  highly  concessional  long  term 
loan, at  this  juncture,  can assist  the  Ukrainian authorities in  overcoming significant  funding 
challenges arising from the conduct and impact of the Russian war of aggression. Moreover, 
by  supporting  the  authorities’  efforts  to  maintain  a  stable  macro-financial  environment,  the 
proposed  MFA  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 MFA is part of the 
EU’s  relief  and  reconstruction  initiative  for  Ukraine  and  is  an  integral  part  of  the  overall 
international support for Ukraine.7 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 212 TFEU constitutes an appropriate legal  basis in  respect  of financial assistance to 
third countries.   

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As confirmed by the IMF to the European Commission in an assessment letter received on 3 June 2022. 
Commission, 
As 
https://ec.europa.eu/info/sites/default/files/ukraine-relief-reconstruction_en.pdf.  

Communication 

18  May 

presented 

the 

the 

by 

in 

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The unprovoked and unjustified military aggression by Russia requires granting of additional 
financial assistance to Ukraine. To reinforce the budgetary sustainability of these measures, it 
is  also  necessary  to  increase  the  coverage  rate  of  the  additional  MFA  loan  to  70%  through 
paid-in provisions under the Union budget.  

• 

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  effectiveness  of  the  assistance,  whilst  limiting  the  burden  on  the  administrative 
capacity of Ukrainian authorities, which is very stretched in the current circumstances. 

• 

Proportionality 

The  proposal  complies  with  the  proportionality  principle:  it  confines  itself  to  the  minimum 
required  in  order  to  achieve  the  objectives  of  maintaining  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 by the authorities and confirmed by 
the  IMF8,  together  with  the  forthcoming  remainder  of  the  planned  exceptional  MFA,  the 
amount  of  the  proposed  MFA  of  up  to  EUR  1  billion  corresponds  to  close  to  half  of  the 
estimated residual funding gap for 2022. 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 be neither suitable nor sufficient to address the 
broader  macro-financial  objectives  of  this  MFA,  nor  the  proposal  of  the  overall  planned 
exceptional MFA. The key value added of the MFA in comparison to other EU instruments is 
to  alleviate  the  external  financial  constraints  swiftly  and  to  help  ensure  a  continued  stable 
macro-financial  framework,  including  by  promoting  a  sustained  and  sustainable  balance  of 
payments  and  budgetary  situation,  within  an  appropriate  framework  for  reporting 
requirements.  By  helping  to  ensure  an  appropriate  overall  policy  framework,  MFA  can 
increase  the  effectiveness  of  the  actions  financed  in  Ukraine  under  other,  more  narrowly-
focused  EU  financial  instruments.  By  setting  up  the  operation  in  a  highly  concessional 
manner,  with  longer  maturities  and  a  subsidy  to  cover  interest  costs,  the  impact  on  the 
country’s debt sustainability is lessened. Swiftly providing the much needed and very sizeable 
amount of financial support through the MFA’s highly concessional set-up for loans therefore 
appears warranted, notably in view of limits the international community, including the EU, 
faces to provide substantial grant financing.  

8 

As  confirmed  by  the  IMF  to  the  European  Commission  in  an  assessment  letter  received  on  27  May 
2022. 

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3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Past ex-post evaluations of previous MFA operations to Ukraine have shown that in general 
they were highly relevant in terms of its objectives, financial envelope and policy objectives.  

They  proved  crucial  to  support  Ukraine  in  addressing  its  balance-of-payment  problems  and 
implementing key structural reforms to stabilise the economy and enhance the sustainability 
of  its  external  position. They  allowed  for  fiscal  savings  and  financial  benefits,  and  acted  as 
catalyst  for  additional  financial  support  and  investor  confidence.  The  MFA  conditionality 
package  was  fully  aligned  with  the  related  IMF  programme  and  created  a  politically 
reinforcing effect that contributed to the mobilisation of Ukrainian authorities around essential 
reforms, especially in areas not covered by other international donor programmes. 

• 

Stakeholder consultations 

This exceptional MFA is provided as an integral part of the international support to Ukraine. 
In the preparation of this proposal, the Commission services have consulted with the IMF, the 
World  Bank  and  other  bilateral  and  multilateral  donors,  with  significant  macro-financial 
expertise,  including  as  regards  the  Ukrainian  economy.  The  Commission  has  also  been  in 
regular contact with the Ukrainian authorities. 

• 

Collection and use of expertise 

Commission services have based this proposal on a careful analysis, conducted in cooperation 
with the IMF and the competent international institutions, of the financial needs and broader 
macro-financial situation of Ukraine.  

Commission  services  have  also  engaged  in  discussions  with  their  counterparts  in  the  risk 
departments of international financial institutions having extensive exposures in Ukraine. The 
purpose of these discussions has been to understand how those institutions will provision for 
and manage their exposures to Ukraine. These discussions have revealed the extent to which 
the institutional approach of each institution depends on how its balance-sheet is exposed to 
the impact of losses on the Ukrainian exposures. Some institutions benefit from full or partial 
counter-guarantees against their exposure or benefit from other forms of safeguard (reserves 
held  by  Ukraine  at  the  IMF).  The  situation  of  the  EU,  which  has  financed  macro-financial 
assistance  loans  through  back-to-back  lending,  means  that  it  is  in  the  unique  situation  of 
having to ensure a steady and predictable stream of payments to its bond-investors according 
to  a  fixed  and  regular  schedule  in  the  event  of  missed  payment  flows  from  the  loan 
beneficiaries. In order to be able to provide this additional MFA swiftly, as a first step in the 
organisation  of  the  full  exceptional  MFA  package  and  on  a  secure  budgetary  footing,  the 
Union needs to apply a provisioning rate of 70% to this additional exposure to Ukraine. 

In line with the requirements of the Financial Regulation, the Commission services will carry 
out  during  the  implementation  of  the  assistance  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, also taking account the exceptional circumstances of the war. This will allow to 
update  previous  assessment,  which  concluded  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. 

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• 

Impact assessment 

The  Union’s  macro-financial  assistance  is  an  exceptional  emergency  instrument  aimed  at 
addressing  severe  balance-of-payment  difficulties  in  third  countries.  Given  the  specific 
context  and  urgency,  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.  This    MFA  will  help 
alleviate the short-term funding needs of Ukraine in the current extraordinary circumstances. 
The  reporting  requirements  to  be  agreed  in  the  MoU  aim  to  ensure  the  efficiency, 
transparency, and accountability of the support. This additional MFA, and the subsequent part 
of  the  exceptional  MFA,  should  build  upon  the  achievements  of  the  six  MFA  programmes 
since 2015, including the latest COVID-19 and the early 2022 emergency MFA assistance.  

The  proposal  was  not  supported  by  an  Impact  Assessment.  The  application  of  a  70% 
provisioning rate follows a thorough financial risk assessment of outstanding liabilities.  

• 

Regulatory fitness and simplification 

The proposal is not linked to regulatory fitness and simplification.  

• 

Fundamental rights 

Countries  that  are  covered  by  the  European  Neighbourhood  Policy  (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 emergency 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.  Similarly,  the  efforts  deployed  to  underpin  their  application  for  an  EU  membership, 
notably  through  providing  elaborated  answer  to  two  very  comprehensive  and  detailed 
questionnaires,  send  a  clear  sign  of  the  authorities’  willingness  to  follow,  and  deliver  upon, 
the  European  aspirations  of  Ukraine.  Since  the  Russian  aggresion,  the  Ukrainian  authorities 
have shown an impressive degree of resilience and have remained 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 at present. 

4. 

BUDGETARY IMPLICATIONS 

The funds for this  up to  EUR  1 billion additional MFA to Ukraine will  be borrowed in  the 
capital  markets  and  on-lent  to  Ukraine.  The  elevated  provisioning  at  a  rate  of  70%,  that  is 
needed  to  reflect  the  higher  risks  associated  with  this  loan  shall  be  applied,  which  deviates 
from Article 31(5), third subparagraph of Regulation (EU) 2021/947. The relevant provisions 
will  be  earmarked  under  the  Neighbourhood,  Development  and  International  Cooperation 
Instrument (NDICI-Global Europe), for a total amount of EUR 700 million (budget line 14 02 
01 70 “NDICI – Provisioning of the Common Provisioning Fund”). 

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In line with the principles of sound financial management, the budgetary protection through 
the increased provisioning rate of 70% is necessary to reflect the more acute risks of losses on 
this  loan  compared  to  traditional  MFA  assistance  to  countries  addressing  a  balance-of-
payment crisis and that typically comes on top of a disbursing IMF programme. This level of 
provisioning provides a high level of confidence that any amounts owed to investors that buy 
the  bonds,  used  to  finance  the  new  loan,  will  be  repaid  in  full  and  on  time.  The  increased 
provisioning rate will be an appropriate response to the accounting losses on any unpaid loans 
that are to be recognised by the EU budget. In the event of non-payment by a beneficiary, the 
Union accounts must recognise a loss for the full amount of the loan in accordance with the 
international financial standards applicable to the Union budget accounts (IPSAS). Given the 
increased  provisioning  rate  for  the  macro-financial  assistance,  it  is  appropriate  to  cover  the 
financial  liability  from  the  macro-financial  assistance  under  this  Decision  separately  from 
other financial liabilities under the External Action Guarantee. In particular, it is appropriate 
to use the provisioning set aside in the Common Provisioning Fund in respect of this macro-
financial assistance solely for financial liabilities under this Decision, instead of applying the 
general  rule  set  out  in  Article  31(6)  of  the  Regulation  (EU)  2021/947  and  not  to  apply  the 
effective provisioning rate, instead of applying the general rule set out in Article 213 of the 
Financial Regulation. In addition, an interest rate subsidy should be exceptionally provided as 
described  below,  to  be  borne  by  the  envelope  referred  to  in  the  first  indent  of  point  (a)  of 
Article  6(2)  of  Regulation  (EU)  2021/947  during  the  period  of  the  MFF  2021-27.  The 
administrative  costs  related  to  the  borrowing  and  lending  would  be  waived  and  thus  not 
recovered from Ukraine. They will be borne under the respective administrative budget lines. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

As a first stage of the implementation of the full exceptional MFA to Ukraine, the European 
Union  shall  make  this  additional  MFA  under  this  Decision  available  to  Ukraine  for  a  total 
amount  of  up  to  EUR  1  billion,  in  the  form  of  a  long-term  loan.  This  assistance,  which  is 
planned to be disbursed as a single instalment, which may be split into one or more tranches, 
will contribute to covering the residual external funding gap of Ukraine in 2022. The release 
of the single instalment would occur swiftly after the approval of this proposal and the entry 
into  force  of  the  corresponding  MoU  that  will    indicate  the  setting-up  of  reporting 
requirements.  

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  will  work  closely  with  the  international  financial  institutions  and  the 
national authorities to monitor relevant developments and the application of the requirements 
and conditions as agreed in the MoU. 

• 

Explanatory documents (for directives) 

Not applicable  

• 

Detailed explanation of the specific provisions of the proposal 

The decision lays down the rules for the macro-financial assistance. 

Article 1 presents the main features of this macro-financial assistance. 

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8 

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Article  2  provides  for  compliance  with  the  political  preconditions  necessary  for  the 
disbursement of the macro-financial assistance.   

Article 3 provides for clearly defined reporting and monitoring requirements that shall be set 
out in a Memorandum of Understanding. 

Article  4  provides  for  the  conditions  necessary  for  the  disbursement  of  this  macro-financial 
assistance.  

Article 5 presents the rules for the borrowing and lending operations. 

Article  6  requires  an  operational  assessment  by  the  European  Commission,  during  the 
implementation of the MFA. 

Article  7  provides  for  specific  rules  on  the  provisioning  to  be  held  in  the  Common 
Provisioning Fund. 

Article  8  stipulates  that  a  Committee  shall  assist  the  Commission,  in  accordance  with 
Comitology procedures. 

Article  9  presents  the  reporting  obligations  of  the  Commission  before  the  European 
Parliament and the Council, during the implementation  of this macro-financial assistance to 
Ukraine.  

Article 10 clarifies the terms of the entry into force of this macro-financial assistance. 

EN 

9 

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2022/0213 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

Providing exceptional 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 procedure9, 

Whereas: 

(1) 

(2) 

(3) 

9 

10 

11 

An  association  agreement  between  the  Union  and  Ukraine10 (the  ‘Association 
Agreement’),  including  a  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA), 
entered into force on 1 September 2017. Given that the European Council of 23 June 
decided  to  recognise  the  European  perspective  of  Ukraine  and  to  grant  Ukraine  the 
candidate  country  status,  it  should  be  considered  to  be  eligible  to  receive  macro-
financial assistance from the Union. 

In spring 2014, Ukraine embarked on an ambitious reform programme with the aim of 
stabilising its economy and improving the livelihoods of its citizens. The fight against 
corruption as well as  constitutional,  electoral  and judicial reforms  are among the top 
priorities  on  the  agenda.  The  implementation  of  those  reforms  was  supported  by  six 
consecutive  macro-financial  assistance  programmes,  under  which  Ukraine  has 
received  assistance  in  the  form  of  loans  for  a  total  of  EUR  6.2  billion.  The  latest 
emergency  macro-financial  assistance,  which  was  made  available  in  the  context  of 
mounting  tensions  at  the  border  with  Russia  pursuant  to  Decision  (EU)  2022/313  of 
the  European  Parliament  and  of  the  Council11  provided  EUR  1.2  billion  in  loans  to 
Ukraine, disbursed in two instalments of EUR 600 million in March and May 2022. 

Russia’s  unprovoked  and  unjustified  military  aggression  against  Ukraine  that  started 
on  24  February  2022  and  the  ongoing  war  since  then  have  caused  a  loss  of  market 
access and a drastic drop in public revenues, while public expenditures to address the 
humanitarian  situation  and  to  maintain  continuity  of  state  services  have  increased 
markedly. In this very uncertain and volatile situation, the best estimates of Ukraine’s 
funding  needs  by  the  International  Monetary  Fund  point to  an  extraordinary  funding 
gap  of  around  USD  39  billion  in  2022  of  which  around  half  could  be  met  if  the 

Position  of  the  European  Parliament  of  16 February  2022  (not  yet  published  in  the  Official  Journal)  and 
decision of the Council of 21 February 2022. 
Association Agreement between the European Union and the European Atomic Energy Community and their 
Member States, of the one part, and Ukraine, of the other part (OJ L 161, 29.5.2014, p. 3). 
Decision  (EU)  2022/313  of  the  European  Parliament  and  of  the  Council  of  24 March  2022  on  providing 
macro-financial assistance to Ukraine (OJ L 55, 28.2.2022, p. 4). 

EN 

10 

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international support pledged thus far would be fully disbursed. The swift provision by 
the  Union  of  this  first  macro-financial  assistance  to  Ukraine,  as  a  first  stage  of  the 
implementation  of  the  full  exceptional  MFA,  is,  under  the  current  extraordinary 
circumstances,  considered to  be an appropriate short-term  response to  the immediate 
most urgent funding needs of Ukraine and to the sizeable risks to the macro-financial 
stability  of  the  country.  The  Union’s  macro-financial  assistance  would  support 
Ukraine’s  macro-financial  stabilisation  and  strengthen  the  resilience  of  the  country, 
thereby  contributing  to  the  public  debt  sustainability  of  Ukraine  and  its  ability  to 
ultimately be in a position to repay its financial obligations. 

The determination of the amount of the Union’s macro-financial assistance under this 
Decision,  while  also  taking  into  account  the  future  complete  exceptional  MFA,  is 
based  on  a  quantitative  assessment  of  Ukraine’s  residual  external  funding  needs, 
conducted in cooperation with the International Monetary Fund and other international 
financial institutions, and takes into account its capacity to finance itself with its own 
resources. This determination also takes into account expected financial contributions 
from bilateral and multilateral donors, 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. The Ukrainian authorities’ commitment to close cooperation with 
the  IMF  on  the  design  and  implementation  of  short-term  emergency  measures  and 
their  intent  to  work  with  the  IMF  on  an  appropriate  economic  programme  when 
conditions  permit  should  be  acknowledged.  The  Union’s  macro-financial  assistance 
should  aim  to  maintain  macro-financial  stability  and  resilience  under  the  war 
circumstances.  The  Commission  should  ensure  that  the  Union’s  macro-financial 
assistance  is  legally  and  substantially  in  accordance  with  the  key  principles  and 
objectives of the measures taken within the different areas of external action and other 
relevant Union policies. 

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

respects  effective  democratic  mechanisms, 

A  precondition  for  granting  the  Union’s  macro-financial  assistance  should  be  that 
including  a  multi-party 
Ukraine 
parliamentary  system,  and  the  rule  of  law,  and  guarantees  respect  for  human  rights. 
The  ongoing  war  conditions,  and  in  particular  the  current  martial  law,  should  not 
encroach  on  these  principles,  despite  the  concentration  of  power  in  the  executive 
branch. 

In order to ensure that the Union’s financial interests linked to the Union’s exceptional 
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 that assistance. In addition, provision should be made for 
the Commission to carry out checks, for the Court of Auditors to carry out audits and 
for the European Public Prosecutor’s Office to exercise its competences. 

The  Union’s  additional  macro-financial  assistance,  as  a  first  stage  of 
the 
implementation  of  the  planned  exceptional  macro-financial  assistance  to  Ukraine, 
should  be  linked  to  reporting  requirements,  to  be  set  out  in  a  memorandum  of 
understanding  (MoU).  The  more  stringent  reporting  requirements  should  aim,  under 
transparency  and 
to  ensure 
the  current  war  circumstances, 

the  efficiency, 

(4) 

(5) 

(6) 

(7) 

(8) 

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11 

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accountability  for  the  use  of  the  funds.  Policy  conditionality,  which  should  aim  to 
strengthen  the  immediate  resilience  of  the  country  and  its  longer-term  debt 
sustainability,  thereby  reducing  risks  linked  to  the  repayment  of  its  outstanding  and 
future financial obligations, will be attached to future MFA operations.  

(9) 

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 Council.12 

(10)  The macro-financial assistance of up to EUR 1 billion under this Decision constitutes 
a  financial  liability  for  the  Union  within  the  overall  volume  of  the  External  Action 
Guarantee. 

(11) 

(12) 

In accordance with Article 210(3) of the Regulation (EU, Euratom) 2018/1046 of the 
European  Parliament  and  of  the  Council  (the  ‘Financial  Regulation’)  the  contingent 
liabilities  arising  from  budgetary  guarantees  or  financial  assistance  borne  by  the 
budget  are  to  be  deemed  sustainable,  if  their  forecast  multiannual  evolution  is 
compatible  with  the  limits  set  by  Council  Regulation  (EU),  Euratom2020/209313 
laying down the multiannual financial framework provided for in Article 312(2) TFEU 
and  the  ceiling  on  annual  payment  appropriations  set  out  in  Article  3(1)  of  Council 
Decision 2014/335/EU, Euratom14. In order to enable the Union to provide substantial 
support  to  Ukraine  through  MFA  in  a  financially  safe  manner,  while  preserving  the 
high credit standing of the Union and, hence, its capacity to deliver effective financing 
in  the  context  of  both  its  internal  and  external  policies,  it  is  essential  to  adequately 
protect the Union budget from the materialization of those contingent liabilities and to 
ensure  they  are  financially  sustainable  in  the  meaning  of  Article  210(3)  of  the 
Financial Regulation. 

In accordance with the principle of sound financial management it is necessary, before 
proceeding  with  the  provision  of  additional  macro-financial  assistance  loans  to 
Ukraine,  to  reinforce  the  resilience  of  the  Common  Provisioning  Fund  with  means 
commensurate to the risks arising from the contingent liabilities linked to this macro-
financial  assistance  to  Ukraine.  Without  such  a  reinforcement,  the  Union  budget 
would not be able to provide, on financially safe grounds, this assistance that the war-
related  needs  of  Ukraine  command.  To  protect  the  Union  budget,  based  on  the 
assessment  at  the  current  juncture  the  envisaged  coverage  for  the  full  exceptional 
MFA loans of up to EUR 8.8 billion to Ukraine, including this instalment of EUR 1 
billion, should be at 70% of the loan value.  

(13)  On this basis, the provisioning rate for this loan of EUR 1 billion should be set at 70% 
instead  of  applying  the  general  rule  set  out  in  Article  31(5),  third  subparagraph  of 
Regulation  (EU)  2021/947  of  the  European  Parliament  and  of  the  Council.15  The 

12 

13 

14 

15 

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). 
Council  Regulation  (EU,  Euratom)  2020/2093  of  17  December  2020  laying  down  the  multiannual 
financial framework for the years 2021 to 2027 (OJ L 433I, 22.12.2020, p. 11). 
Council  Decision  2014/335/EU,  Euratom  of  26  May  2014  on  the  system  of  own  resources  of  the 
European Union (OJ L 168, 7.6.2014, p. 105). 
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/Union of the European Parliament and of the Council 

EN 

12 

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corresponding  amount  of  EUR  700  million  should  be  financed  from  the  geographic 
envelope  under  Regulation  (EU)  2021/947.  This  amount  should  be  committed  and 
paid into a dedicated compartment of the Common Provisioning Fund in the period up 
to 2027. 

(14)  Given the increased provisioning rate for this instalment of macro-financial assistance, 
it is  appropriate  to  manage the financial liability  from the macro-financial assistance 
under  this  Decision  separately  from  other  financial  liabilities  under  the  External 
Action  Guarantee.  It  is  moreover  proposed  to  use  the  provisioning  set  aside  in  the 
Common  Provisioning  Fund  in  respect  of  this  macro-financial  assistance  solely  for 
financial liabilities under this Decision, instead of in accordance with the general rule 
set  out  in  Article  31(6)  of  Regulation  (EU)  2021/947.  This  should  be  followed  by 
exclusion  of  the  provisioning  set  aside  in  respect  of  this  macro-financial  assistance 
from the application of the effective provisioning rate implemented in accordance with 
Article 213 of the Financial Regulation. 

(15)  Since  the  objective  of  this  Decision,  namely  to  provide  additional  macro-financial 
assistance to Ukraine with a view to supporting, in particular, its economic resilience 
and stability, 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(3) of 
the  Treaty  on  European  Union  (TEU).  In  accordance  with  the  principle  of 
proportionality,  as  set  out  in  paragraph  4  of  that  Article,  this  Decision  does  not  go 
beyond what is necessary to achieve that objective. 

(16) 

In view of the urgency entailed by the exceptional circumstances caused by Russia’s 
unprovoked and unjustified military aggression, it is considered 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. 

(17)  Given the difficult  situation of Ukraine  caused by Russia’s war of  aggression  and to 
support  it  on  its  long-term  stability  path,  it  is  appropriate  to  derogate  from  Article 
220(5),  point  (e)  of  the  Financial  Regulation  and  to  allow  that  the  Union  has  the 
possibility to cover the interest rate costs related to this loan and waive to Ukraine the 
administrative  costs.  The  interest  rate  subsidy  should  be  exceptionally  granted  as  an 
instrument  deemed  appropriate  to  ensure  the  effectiveness  of  the  support  within  the 
meaning  of  Article  220(1)  of  the  Financial  Regulation  and  should  be  borne  by  the 
Union’s  budget.  During  the  period  of  the  MFF  2021-27  it  should  be  borne  by  the 
envelope  referred  to  in  the  first  indent  of  Article  6(2),  point  (a)  of  Regulation  (EU) 
2021/947.  The  interest  rate  subsidy  and  the  waiver  of  administrative  costs  could  be 
requested by Ukraine every  year by the end of March. To allow for flexibility in  the 
repayment  of  the  principal,  it  should  also  be  possible  to  roll  over  the  associated 
borrowings  contracted  on  behalf  of  the  Union,  by  derogation  from  Article  220(2)  of 
the Financial Regulation. 

(18)  Given  the  urgent  situation  in  Ukraine  this  Decision  should  enter  into  force  the  day 
following that of its publication in the Official Journal of the European Union. 

and repealing Regulation (EU) 2017/1601 of the European Parliament and of the Council and Council 
Regulation (EC, Euratom) No 480/2009 (Text with EEA relevance), OJ L 209, 14.6.2021, p. 1. 

EN 

13 

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HAVE ADOPTED THIS DECISION:  

1. 

2. 

3. 

4. 

5. 

6. 

7. 

1. 

2. 

Article 1 

The  Union  shall  make  available  to  Ukraine  macro-financial  assistance  for  a 
maximum amount of EUR 1 000 million (the ‘Union’s macro-financial assistance’), 
in accordance with paragraph 3, with a view to supporting Ukraine’s macro-financial 
stability. The Union’s macro-financial assistance shall be provided to Ukraine in the 
form of a loan. 

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  in  the  capital 
markets or from financial institutions and to on-lend them to Ukraine. The loan shall 
have a maximum average maturity of 25 years. 

The  envelope  referred  to  in  Article  6(2),  point  (a),  first  indent  of  Regulation  (EU) 
2021/947 shall be used to cover the costs of interest payments related to the macro-
financial  assistance  during  the  period  of  2021-27  MFF  as  interest  rate  subsidy 
referred to in Article 5(2) of this Decision. 

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  Commission  and  Ukraine  in  the  Memorandum  of  Understanding 
(ʻMoUʼ) referred to in Article 3(1). 

The Commission shall regularly inform the European Parliament and the Council of 
developments 
including 
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 starting on the first 
day  after  the  entry  into  force  of  the  MoU  referred  to  in  Article 3(1)  and  during  an 
availability period of one year. 

If  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 shall reduce the amount of the assistance, suspend it or 
cancel it. 

Article 2 

A  precondition  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 the precondition set out in paragraph 1 throughout the life-cycle of the 
Union’s macro-financial assistance, in particular before disbursements are made, also 
taking  into  account  the  circumstances  on  the  ground  and  the  consequences  of  the 
application of martial law. 

EN 

14 

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3. 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

4. 

Paragraphs 1 and 2 of this  Article shall apply in  accordance with  Council Decision 
2010/427/EU.16 

Article 3 

The Commission shall agree with Ukraine on clearly defined reporting requirements 
to  which  the  Union’s  macro-financial  assistance  is  to  be  linked.  The  reporting 
requirements  shall  be  set  out  in  a  MoU  and  adopted  in  accordance  with  the 
examination procedure referred to in Article 8(2). 

The  reporting  requirements  shall  ensure,  in  particular,  the  efficiency,  transparency 
and  accountability  of  the  use  of  the  Union’s  macro-financial  assistance.  The 
Commission  shall  regularly  monitor 
these  reporting 
the 
requirements. 

implementation  of 

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, the implementation of the macro-
financial  assistance,  and  notably  of  the  reporting  requirements  agreed  in  the  MoU. 
The  Commission  shall  inform  the  European  Parliament  and  the  Council  about  the 
results of that verification. 

Article 4 

Subject to the requirements referred to in paragraph 3, the Union’s macro-financial 
assistance shall be made available by the Commission in  a single instalment, in the 
form of a loan. The Commission shall decide on the timeframe for the disbursement 
of the instalment. The instalment may be disbursed in one or more tranches. 

The  Commission  shall  decide  on  the  release  of  the  instalment  subject  to  its 
assessment of the following requirements:  

(a) 

(b) 

respect for the precondition set out in Article 2(1);  

entry  into  force  of  the  MoU,  which  shall  provide  for  the  setting-up  of  a 
reporting system applicable during the entire period of the loan. 

Where  the  requirements  set  out  in  paragraph  3  are  not  met,  the  Commission  shall 
temporarily  suspend  or  cancel  the  disbursement  of  the  Union’s  macro-financial 
assistance,  or  take  appropriate  measures  pursuant  to  the  loan  agreement.  In  such 
cases, it shall inform the European Parliament and the Council of the reasons for the 
suspension or cancellation. 

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

16 

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 

15 

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Article 5 

1. 

2. 

3. 

4. 

5. 

The borrowing and lending operations shall be carried out in accordance with Article 
220 of the Financial Regulation.  

By derogation from Article 220(5), point (e) of the Financial Regulation, the Union 
may  bear  interests  by  granting  an  interest  rate  subsidy  and  administrative  costs 
related  to  the  borrowing  and  lending,  with  the  exception  of  costs  related  to  early 
repayment of the loan, in respect of the loan under this Decision. 

Ukraine  may  request  the  interest  rate  subsidy  and  coverage  of  the  administrative 
costs by the Union by the end of March of each year. 

Where necessary, by derogation from Article 220(2) of the Financial Regulation, the 
Commission  may  roll  over  the  associated  borrowings  contracted  on  behalf  of  the 
Union. 

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

Article 6 

During the implementation of the macro-financial assistance, the Commission shall re-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. 

1. 

2. 

3. 

1. 

2. 

Article 7 

For the macro-financial assistance provided in the form of a loan under this Decision, 
provisioning  rate  of  70%  shall  apply  instead  of  the  general  rule  set  out  in  Article 
31(5), third subparagraph of Regulation (EU) 2021/947.  

Instead of the general rule set out in Article 31(6) of Regulation (EU) 2021/947, the 
financial liabilities from the macro-financial assistance provided in the form of a loan 
under this Decision shall be covered separately from other financial liabilities under 
the  External  Action  Guarantee  and  the  provisioning  set  aside  in  the  Common 
Provisioning Fund in respect of the macro-financial assistance provided in the form 
of a loan under this Decision shall be used solely for the financial liabilities derived 
therefrom. 

By  way  of  derogation  from  Article  213  of  the  Financial  Regulation,  the  effective 
provisioning  rate  shall  not  apply  to  the  provisioning  set  aside  in  the  Common 
Provisioning  in  respect  to  the  macro-financial  assistance  provided  in  the  form  of  a 
loan under this Decision.  

Article 8 

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. 

EN 

16 

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Article 9 

1. 

2. 

By 30 June of each  year, the Commission  shall submit  to  the European Parliament 
and to the Council, as part of its Annual Report, an assessment of the implementation 
of Chapter  I of this Decision in  the preceding  year, including  an evaluation  of that 
implementation. That report shall: 

(a) 

(b) 

(c) 

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

assess  the  economic  situation  and  prospects  of  Ukraine,  as  well  as  the 
implementation of the requirements and conditions referred to in Article 3(1); 

indicate the connection between the requirements and conditions set out in the 
MoU,  Ukraine’s  ongoing  macro-financial  situation  and  the  Commission’s 
decision to release the instalment of the Union’s macro-financial assistance. 

Not later than two years after the end of the availability period, 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. 

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

Article 10 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

17 

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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 
macro-financial assistance to Ukraine. 

1.2. 

Policy area(s) concerned in the ABM/ABB structure17 

Policy area: Economic and Financial Affairs 

Activity: International economic and financial affairs 

1.3. 

The proposal/initiative relates to:  

  a new action  

a new action following a pilot project/preparatory action18  

 the extension of an existing action  

 a merger or redirection of one or more actions towards another/a new action  

1.4. 

Objective(s) 

1.4.1.  General objective(s) 

 “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 

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. 

 

Provide  macro-financial  assistance  to  Ukraine  with  a  view  to  supporting  its 
economic resilience and stability under the war circumstances. 

17 
18 

ABM: activity-based management; ABB: activity-based budgeting. 
As referred to in Article 58(2)(a) or (b) of the Financial Regulation. 

EN 

18 

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 

Contribute to covering the external  funding needs of Ukraine for 2022, in the 
context  of  a  significant  deterioration  of  their  external  accounts  brought  about 
by the unprovoked and unjustified Russian invasion of Ukraine. 

Alleviate the partner’s budgetary financing needs. 

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

improving 

 

 

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  on  the  reporting  requirements  included  in  the 
MoU.  

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.  

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 
release of the last instalment.  

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  listed  in  a  Memorandum  of  Understanding  between  the  Commission  and  the 
authorities of Ukraine. The assistance is planned to be disbursed in  a single instalment. The 
release of the instalment would occur swiftly after the approval of this proposal and the entry 
into force of the corresponding MoU.  

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 reporting requirements. The Commission will work closely with the 
international  financial 
to  monitor  relevant 
developments and the application of the requirements and conditions as agreed in the MoU. 

the  national  authorities 

institutions  and 

EN 

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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. 

This  proposal  for  macro-financial  assistance  of  up  to  EUR  1  billion  to  Ukraine  follows  the 
Decision (EU) 2022/313 on providing macro-financial assistance to Ukraine in the amount of 
EUR  1.2  billion  in  loans,  which  was  fully  disbursed  in  two  instalments  in  March  and  May 
2022. This MFA reinforces also actions by the Union for direct humanitarian, economic and 
defence support,  as well as Union’s initatives to coordinate multilateral  actions, such  as the 
“Stand-up for Ukraine”. By its very nature, MFA is also a catalyst for reforms that strengthen 
the  short-term  resilience  of  the  country  and  are  also  conducive  to  enhanced  longer-term 
stability.  These  expected  outcomes  are  particularly  relevant  for  Ukraine  at  this  critical 
moment. 

The provision of further support to Ukraine in the form of loans, at this juncture, can assist the 
Ukrainian  authorities  in  overcoming  the  immediate  and  most  urgent  funding  challenges 
arising  from  the  conduct  of  the  war.  Moreover,  by  supporting  the  authorities’  efforts  to 
maintain a stable macro-financial environment, the proposed MFA 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. 

Project finance or technical assistance would be neither suitable nor sufficient to address the 
broader macro-financial objectives of this exceptional MFA. The key value added of the MFA 
in comparison to other EU instruments is to alleviate the external financial constraints swiftly 
and to  help  ensure a continued stable macro-financial framework, including by  promoting  a 
sustained and sustainable balance of payments and budgetary situation, within an appropriate 
framework  for  reporting  requirements.  By  helping  to  ensure  an  appropriate  overall  policy 
framework,  MFA  can  increase  the  effectiveness  of  the  actions  financed  in  Ukraine  under 
other, more narrowly-focused EU financial instruments. 

1.5.3.  Lessons learned from similar experiences in the past 

Macro-financial  assistance  operations  in  partners  are  subject  to  ex-post  evaluation.  Past  ex-
post evaluations of previous MFA operations to Ukraine have shown that in general they were 
highly relevant in terms of its objectives, financial envelope and policy objectives.  

They  proved  crucial  to  support  Ukraine  in  addressing  its  balance-of-payment  problems  and 
implementing key structural reforms to stabilise the economy and enhance the sustainability 
of  its  external  position. They  allowed  for  fiscal  savings  and  financial  benefits,  and  acted  as 
catalyst  for  additional  financial  support  and  investor  confidence.  The  MFA  conditionality 
package  was  fully  aligned  with  the  related  IMF  programme  and  created  a  politically 
reinforcing effect that contributed to the mobilisation of Ukrainian authorities around essential 
reforms, especially in areas not covered by other international donor programmes. 

EN 

20 

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1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

In principles, the provisions for macro-financial assistance in the MFF 2021-2027 are built at 
the rate of 9% to the Common Provisioning Fund established under Article 212 of Regulation 
(EU, Euratom) 2018/1046 of the European Parliament and of the Council.  

In accordance with the principle of sound financial management and in view of the currently 
estimated risk exposure, it is necessary to cover these additional exposures to Ukraine at the 
rate of 70% of provisions under the Union budget. 

In addition, given the difficult situation of Ukraine and to support it on its long-term stability 
path, the Union should have the possibility to exceptionally cover the interest rate costs and 
waive  to  Ukraine  the  administrative  costs.  The  interest  rate  subsidy  should  be  borne  by  the 
envelope  referred  to  in  the  first  indent  of  point  (a)  of  Article  6(2)  of  Regulation  (EU) 
2021/947 for the period 2023-2027. 

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. The provision of further support to Ukraine in the 
form of a loan, at this juncture, can assist the Ukrainian authorities in overcoming significant 
funding  challenges  arising  from  the  conduct  of  the  war.  Moreover,  by  supporting  the 
authorities’  efforts  to  maintain  a  stable  macro-financial  environment,  the  proposed  MFA 
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 MFA is also part of a 
broader  EU  relief  and  reconstruction  initiative  for  Ukraine  and  is  an  integral  part  of  the 
overall international support for Ukraine.19 

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

redeployment 

By using a loan, 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 

19 

EN 

presented 

As 
https://ec.europa.eu/info/sites/default/files/ukraine-relief-reconstruction_en.pdf.  

Communication 

18  May 

the 

by 

in 

the 

Commission, 

21 

  EN 

 
 
 
 
 
 
                                                 
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 

22 

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1.6. 

Duration and financial impact of the proposal/initiative 

 limited duration  

–    in effect from [DD/MM]YYYY to [DD/MM]YYYY  

–    Financial  impact  from  YYYY  to  YYYY  for  commitment  appropriations  and 

from YYYY to YYYY for payment appropriations.  

 unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Management mode(s) planned20  

 Direct management by the Commission 

–   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. 

20 

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.  

This assistance is of macroeconomic nature. The monitoring of the action by the Commission 
services will take place on the basis of the specific measures to be agreed with the Ukrainian 
authorities in a Memorandum of Understanding. 

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.  

MFA  disbursements  are  dependent  on  successful  reviews,  and  tied  to  the  fulfilment  of 
political  pre-conditions  attached  to  the  operation.  The  respect  of  these  conditions  is  closely 
monitored by the Commission. 

2.2.2. 

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

 Risks identified 

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

A  key  risk  to  the  operation  stems  from  the  continuation  of  the  war  caused  by  the  Russian 
unjustified and unprovoked invasion of Ukraine, which could have a further negative impact 
on  Ukraine’s  macroeconomic  stability,  affecting  the  disbursement  and/or  repayment  of  the 
proposed MFA.  

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 third risk stems from the possibility that Ukraine will fail to service the financial liabilities 
towards the EU stemming from the proposed MFA loan (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. 

Internal control systems 

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 

EN 

24 

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(OLAF), and by the European Court of Auditors as foreseen by Article 129 of the Financial 
Regulation 

the 

implementation, 

the  Commission  will  check  periodically 

During 
the  partner’s 
declarations. The payment is subject to (1) monitoring by DG ECFIN staff and (2) the normal 
control  procedure  provided  for  by  the  financial  circuit  (model  2)  used  in  DG  ECFIN.  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 have ensured an effective error rate for MFA payments so far 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  reporting  requirements  will  be  linked  to  the  assistance,  with  a  view  to 
strengthening transparency and accountability on the use of funds. Also, the assistance will be 
paid to a specific account of the National Bank of Ukraine.   

Moreover, in line with the requirements of the Financial Regulation, the Commission services 
will  carry  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  previous  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.  The  Commission  will 
carry  out  a  second  Operational  Assessment  during  the  implementation  of  the  proposed 
exceptional MFA operation.  

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  

6 

6 

14 02 01 11 “Eastern neighbourhood” 

14 02 01 70 “NDICI – Global Europe 
–  Provisioning  of 
the  Common 
Provisioning Fund” 

Type of 
expenditure 

Diff./Non-
diff.21 

Diff. 

Diff. 

Contribution  

from 
EFTA 
countries
22 

from 
candidate 
countries23 

from third 
countries 

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

NO 

NO 

NO 

NO 

NO 

NO 

NO 

NO 

  New budget lines requested – Not applicable 

21 
22 
23 

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 

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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  

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

Heading of multiannual financial  
framework  

6 

                           Heading 6 - 'Neighbourhood and the World'  

EUR million (to three decimal places) 

DG: NEAR 

□ Operational appropriations  

Year 

2021 

Year 

2022 

Year 

2023 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 

Budget line24  

Commitments 

(1a) 

14 02 01 11 ” Eastern neighbourhood” 
25 

Payments 

(2a) 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

100.0 

100.0 

DG: ECFIN 

Budget line 

14 02 01 70 “NDICI – Provisioning of 
the Common Provisioning Fund” 26 

Year 

2021 

Year 

2022 

Year 

2023 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 

Commitments 

(1b) 

27.3 

125.0 

162.6 

32.5 

143.4 

143.4 

65.8 

700.0 

24 
25 
26 

According to the official budget nomenclature. 
To be reinforced from the NDICI Emerging challenges and priorities cushion, budget line 14 02 04. 
Amount of the provisioning for MFA loans (9%) to be committed and paid into the Common Provisioning Fund in the period 2021-2027, subject to the adoption of the annual budgets. 

EN 

27 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Payments 

(2b) 

 81.2 

 100.0 

 300.0 

 218.8 

700.0 

Appropriations  of  an  administrative  nature  financed  from  the 
envelope of specific programmes27  

Budget line 
14.20.03.01 MFA Grants 

Commitments  

(1c) 

Payments 

(2c) 

0.1 

0.1 

0.15 

0.15 

TOTAL appropriations for DG ECFIN 

Commitments 

Payments 

□  TOTAL  operational 
(NEAR +ECFIN) 

appropriations 

Commitments 

Payments 

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

=1b + 
1c 

=2b 

+2c 

(3) 

(4) 

(5) 

27.3 

125.1 

162.6 

32.5 

143.5 

143.4 

65.8 

0.1 

 81.2 

 100.1 

 300.0 

 218.8 

27.3  

125.1 

182.6 

52.5 

163.5 

0.1 

20.0 

 1012 

120.1 

163.4 

320.0 

85.8 

 238.8 

TOTAL appropriations under 
HEADING 6 of the multiannual financial 
framework 

Commitments 

= 3+ 5 

27.3  

125.1 

182.6 

52.5 

163.5 

163.4 

85.8 

Payments 

= 4+ 5 

0.1 

20.0 

 101.2 

120.2 

 320.0 

 238.8 

0.25 

0.25 

700.25 

700.25 

800.25 

800.25 

800.25 

800.25 

27 

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 

28 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Heading of multiannual financial framework  

7 

‘Administrative expenditure’ 

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 

□ Human resources  
□ Other administrative expenditure  

TOTAL DG ECFIN 

Appropriations  

Year 

2022 

Year 

2023 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 

EUR million (to three decimal places) 

0.848 

- 

0.848 

0.424 

0.06 

0.484 

0.424 

- 

0.424 

0.072 

- 

0.072 

0.072 

- 

0.072 

0.072 

- 

0.072 

1.912 

0.06 

1.972 

TOTAL appropriations 

under HEADING 7 

of the multiannual financial framework  

TOTAL appropriations under 
HEADINGS 1 to 7 of the multiannual 
financial framework  

(Total  commitments  =  Total 
payments) 

0.848 

0.434 

0.424 

0.072 

0.072 

0.072 

1.972 

Year 

2021 

Year 

2022 

Year 

2023 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 

EUR million (to three decimal places) 

Commitments 

27.3 

125.948 

183.084 

52.924  163.572 

163.472 

85.872 

802.172 

Payments 

0.948 

20.484 

101.624 

120.172 

320.072 

238.872 

802.172 

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29 

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3.2.2.  Estimated output funded with operational appropriations  

Year 2022 

Year 2023 

Year 2024 

Year 2025 

Year 2026 

Year 2027 

TOTAL 

OUTPUTS 

Commitment appropriations in EUR million (to three decimal places) 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost  N

o

Cost 

o
N

Cost 

Total 
No 

Total 
cost 

20.0 

20.0 

20.0 

20.0 

20.0 

100.0 

Indicate 
objectives and 
outputs  

 

Type28 

SPECIFIC OBJECTIVE No 129… 

- Output 

- Output 

- Output 

- Output 

Grant 
disbursements 

Provisioning 
of the External 
Action 
Guarantee 
Operational 
Assessment 

Ex-post 
evaluation 

700.0 

1 

0.1 

Subtotal for specific objective No 1 

700.1 

TOTAL 

700.1 

1 

1 

1 

0.15 

20.15 

20.15 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

1 

1 

700.0 

0.1 

0.15 

800.25 

800.25 

28 
29 

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)…’  

EN 

30 

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 

Year 2026 

Year 2027 

TOTAL 

HEADING 7 

of the multiannual 
financial framework 

Human resources  

0.848 

0.424 

0.424 

0.072 

0.072 

0.072 

1.912 

- 

0.06 

- 

- 

- 

- 

0.06 

0.848 

0.484 

0.424 

0.072 

0.072 

0.072 

1.972 

Other administrative 
expenditure  

Subtotal HEADING 7 

of the multiannual 
financial framework  

Outside HEADING 730  

of the multiannual 
financial framework  

Human resources  

Other expenditure of an 
administrative nature 

Subtotal outside 
HEADING 7 of the 
multiannual financial 
framework  

TOTAL 

0.848 

0.484 

0.424 

0.072 

0.072 

0.072 

1.972 

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,  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. 

30 

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 

31 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.1.  Estimated requirements of human resources  

–  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 

Year 
2026 

Year 
2027 

TOTAL 

□ Establishment plan posts (officials and temporary staff) 

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

5.4 

2.7 

2.7 

0.45 

0.45 

0.45 

12.15 

20 01 02 03 (Delegations) 

01 01 01 01  (Indirect research) 

 01 01 01 11 (Direct research) 

Other budget lines (specify) 

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  32 

- 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 

□ External staff (in Full Time Equivalent unit: FTE)31 

5.4 

2.7 

2.7 

0.45 

0.45 

0.45 

12.15 

XX is the policy area or budget title concerned. 

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 temporary staff 

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 

31 

32 

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 

32 

  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 

33 

  EN 

 
3.2.4.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–   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: 

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

EN 

34 

  EN 

 
 
 
 
3.3. 

Estimated impact on revenue  

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

EN 

35 

  EN