Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL providing exceptional macro-financial assistance to Ukraine, reinforcing the Common Provisioning Fund by guarantees by the Member States and by specific provisioning for some financial liabilities related to Ukraine guaranteed under Decision No 466/2014/EU, and amending Decision (EU) 2022/1201
Date: 2022-09-07
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU aid, EU loan, European neighbourhood policy, Russia, Ukraine, economic reform, economic stabilisation, fund (EU), macro-financial assistance, territorial dispute

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 7.9.2022  COM(2022) 557 final 2022/0281 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL providing exceptional macro-financial assistance to Ukraine, reinforcing the Common Provisioning Fund by guarantees by the Member States and by specific provisioning for some financial liabilities related to Ukraine guaranteed under Decision No 466/2014/EU, and amending Decision (EU) 2022/1201  
 
EXPLANATORY MEMORANDUM 

1. 

 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

This  proposal  seeks  to  enable  the  EU  to  provide  further  exceptional  macro-financial 
assistance (MFA) to Ukraine of EUR 5 billion in loans, while equipping the EU budget with 
the means to absorb the risk of losses on these additional loans and on the EUR 1 billion MFA 
loan  adopted  on  12  July  2022.  In  addition,  it  also  seeks  to  extend  the  same  budgetary 
protection for the disbursement of already signed External Lending Mandate (ELM) loans to 
the Ukrainian authorities and Ukrainian state-owned entities after 15 July 2022. 

 

General context 

The  EU’s  support  for  Ukraine  is  embedded  in  a  strong  long-term  relationship.  Ukraine  has 
been  developing  a  strong  partnership  with  the  EU  since  2014,  going  beyond  mere  bilateral 
cooperation  to  evolve  towards  gradual  political  association  and  economic  integration.  The 
EU-Ukraine Association Agreement (AA), which entered into force on 1 September 2017 and 
includes a Deep and Comprehensive Free Trade Area (DCFTA), has been the main tool for 
bringing  Ukraine  and  the  EU  closer  together.  In  addition  to  promoting  deeper  political  ties, 
stronger economic links and 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 significant structural  reforms, which are crucial for 
attracting investments, boosting productivity and raising the standards of living in the medium 
and longer term. Following the country’s application for EU membership and the granting of 
candidate  country  status,  cooperation  with  Ukraine  is  set  to  deepen  further  as  the  country 
moves forward on its European path1.  

Ukraine’s long-term economic development and focus on reform orientation of Ukraine face 
very  significant  challenges  since  Russia  invaded  the  country  on  24  February  2022  in  an 
unprecedented  act  of  unjustified  and  unprovoked  aggression.  In  addition  to  the  human 
suffering,  the  on-going  Russian  war  of  aggression  against  Ukraine  has  caused  considerable 
damage  to  the  country’s  physical  infrastructure  (roads,  bridges,  factories,  etc.)  and  its 
residential and communal buildings (housing units, schools, hospitals, etc.). The fighting has 
also caused a massive human exodus, with more than 8 million internally displaced persons 
and  more  than  6  million  refugees.  The  estimates  of  the  overall  impact  on  the  economy,  in 
terms  of  loss  of  output  in  2022  and  foregone  future  production  due  to  the  destruction  of 
capital and the migration of labour, range in the hundreds of billions. In 2022 alone, Ukraine’s 
GDP is expected to fall by between 30% and 50%, which would mean a further loss of more 
than EUR 100 billion, in addition to the destruction of physical capital. 

In addition to inflicting massive damage to the economy, Russia’s war of aggression against 
Ukraine  has  caused  the  sovereign  to  lose  access  to  the  international  capital  markets.  The 
resulting  underlying  balance-of-payments  funding  gap  was  estimated  by  the  authorities  and 
the International Monetary Fund (IMF) in June 2022 to reach around USD 39 billion for the 
whole of 2022. In the IMF’s initial assessment, Ukraine could finance USD 9 billion of this 

1 

Ukraine applied officially for EU membership on 28 February 2022, 4 days after the Russian invasion, 
and was granted candidate country status by the European Council on 23 June 2022. 

EN 

1 

  EN 

                                                 
gap through a safe draw-down on its official international reserves that would not threaten its 
macro-financial stability2. 

Bilateral and multilateral commitments of financial support pledged to Ukraine in the context 
of  the  G7  Finance  Ministers  and  Central  Bank  Governors  meeting  in  Petersberg  on  18-20 
May have reached almost USD 20 billion. While these commitments are crucial to support the 
functioning  of  the  Ukrainian  state,  even  their  full  and  prompt  disbursement  would  mean  an 
uncovered residual gap of around USD 10 billion of the funding needs estimated by the IMF. 
The  release  of  a  sizeable  part  of  the  remainder  of  the  exceptional  MFA  would  provide  an 
additional significant relief and help cover part of this shortfall.  

Reflecting the sizeable gap between commitments and disbursements, among other issues, the 
country’s international reserves decreased by the equivalent of USD 8.5 billion in the first 7 
months of 2022 and stood at around USD 22.3 billion by the end of July (covering around 3.5 
months of future imports), thus leaving only very limited buffers for drawing down reserves 
for the remainder of the  year (with USD 20 billion often seen as a  critical  level  of reserves 
needed  to  ensure  macroeconomic  stability  in  the  country).  In  this  increasingly  challenging 
context, on 21 July, the Ukrainian central bank (NBU) devalued the hryvnia by 25% against 
the US dollar, while keeping the fixed exchange rate regime. This step has been accompanied 
by additional measures to minimise the demand for foreign currency3. 

Ukraine  also  launched,  on  21  July,  a  formal  consent  solicitation  on  the  suspension  of  its 
commercial debt service at least until the end of 2023. This debt service suspension initiative, 
which  was  welcomed  and  backed  by  an  intention  to  do  the  same  by  key  bilateral  official 
creditors,  notably  the  Group  of  Creditors  of  Ukraine4.  It  provides  for  an  important 
contribution to help Ukraine manage its liquidity and is expected to provide further budgetary 
relief.  

On  the  EU  side,  many  Member  States  have  provided  grants  and  pledged  further  loans  and 
guarantees,  either  bilaterally  or  through  international  financial  institutions.  Bilateral  loans 
provided to date by EU Member States are concessional in nature and contain a considerable 
grant  element  when  applying  the  established  OECD  methodology  for  the  calculation  of  the 
grant element of official development aid.  

The EU itself has provided EUR 2.2 billion to Ukraine in the form of MFA loans in the course 
of 2022. EUR 1.2 billion of emergency MFA was disbursed in March and May and a further 
EUR 1 billion of exceptional MFA was disbursed on 1 and 2 August5. The latter is the first 
part  of  the  exceptional  MFA  support  of  up  to  EUR  9  billion  that  was  announced  in  the 
Commission’s 18 May  Communication on Ukraine Relief  and Reconstruction and endorsed 
by the European Council on 23-24 June 2022. Faced with the large overall funding gap, the 
EU  has  announced  its  determination  to  make  a  sizeable  contribution  towards  financing 

2 
3 

4 

5 

As confirmed by the IMF to the European Commission in an assessment letter received on 3 June 2022. 
First,  the  NBU  permitted  banks  to  sell  cashless  foreign  currency  with  the  purpose  of  depositing  the 
amount for at least three months without the right for early termination. Second, more stringent limits 
have been imposed for the card-based cash withdrawal of foreign currency as well as for transfers and 
payments abroad. Third, the algorithm for calculating banks’ open FX positions has been adapted and 
will come into effect on 1 August 2022. 
The Group of Creditors of Ukraine includes Canada, France, Germany, Japan, United Kingdom, and the 
United  States  of  America.  Observers  to  the  Group  include  Australia,  Austria,  Belgium,  Brazil, 
Denmark,  Finland,  Ireland,  Israel,  Italy,  Korea,  the  Netherlands,  Norway,  Spain,  Sweden,  and 
Switzerland. 
The single instalment of the exceptional MFA of up to EUR 1 billion was finalised in two tranches on 
two consecutive days in order to optimize the average interest rate on the funds borrowed. 

EN 

2 

  EN 

                                                 
 
 
 
Ukraine’s  remaining  funding  needs  for  the  whole  of  2022.  The  urgency  for  releasing 
significant  funds  by  the  end  of  the  year  is  further  underscored  by  the  limited  flow  of 
international financial support pledged for the fourth quarter.6 

Following  the  call  from  the  European  Council  of  23-24  June  and  given  the  urgency  of 
Ukraine’s short term funding needs, the European Commission presented a first proposal for 
exceptional MFA of up to EUR 1 billion, which was fully disbursed in two tranches on 1 and 
2 August 2022. To make progress with the delivery of that exceptional support package, the 
European Commission presents this proposal for a further exceptional MFA of EUR 5 billion 
in loans to Ukraine. The remaining up to EUR 3 billion of the announced exceptional MFA of 
up to EUR 9 billion will be provided as soon as possible.  

In addition to the provision of direct support, the European Commission agreed in July 2022 
to  the  repurposing  of  EUR  1.59  billion  in  undisbursed  loans  provided  under  the  External 
Lending Mandate (ELM), of which EUR 1.05 billion is to be disbursed by the EIB during the 
third  quarter  of  2022  as  support  for  the  Ukrainian  authorities  and  EUR  536  million  of  EIB 
loans  to  be  disbursed  at  a  later  stage  with  the  purpose  of  resuming  selected  projects.  This 
comes in addition to the EUR 668 million that the Commission and EIB had already agreed to 
repurpose in March 2022 and which was disbursed within 1 month of the start of Russia’s war 
of aggression. 

The MFA loans and repurposed ELM loans come in addition to many other types of support 
by the EU, notably humanitarian aid, development and defence assistance, the suspension of 
all  import  duties  on  Ukrainian  exports  for  1  year  and  other  solidarity  initiatives,  e.g. 
addressing transport bottlenecks so that exports, in particular of grains, could be ensured.7  

Moreover, this extensive programme of EU support is part of the extraordinary international 
effort  by  bilateral  donors  and  international  financial  institutions  to  support  Ukraine  at  this 
critical juncture, and on its way to longer-term reconstruction. 

Finally, in light of the elevated risk of financial exposures to Ukraine, this proposal clarifies 
the budgetary means that are needed to underpin the granting of additional exceptional MFA 
loans for an amount of EUR 5 billion and the disbursement of repurposed ELM loans. 

 

(1) 

Main elements of this proposal 

Exceptional nature of this MFA operation 

Given the unprecedented circumstances of the Russian war of aggression against Ukraine, this 
exceptional  MFA  differs  from  regular  MFA  operation  by  offering  increased  flexibility  in 
several  respects.  The  concessional  nature  of  the  assistance  is  strengthened  through  a  higher 
average maturity of the loans of up to 25 years and the possibility for the EU budget to cover 
the  interest  rates  and  administrative  fee  payments.  In  addition,  in  the  current  context  and 
unlike regular MFA operations, the proposed exceptional MFA of up to EUR 5 billion is not 
formally linked to a disbursing IMF programme.  

A  Memorandum  of  Understanding  (MoU),  to  be  agreed  with  the  Ukrainian  authorities, 
presents the details related to the release of the loan instalments. In addition to selected policy 

6 

7 

The  Ukrainian Ministry of  Finance, in collaboration  with the IMF, expects that budget  support in the 
fourth quarter has been sufficiently secured by firm donor commitments will be somewhat higher than 2 
billion dollar. 
The  website  https://eu-solidarity-ukraine.ec.europa.eu/eu-assistance-ukraine_en  gives  an  overview  of 
stepped up efforts by the EU.   

EN 

3 

  EN 

 
                                                 
conditions to which disbursements under this second part of the exceptional MFA to Ukraine 
will be linked, this MoU will also require the use of the reporting systems set up in the context 
of  the  first  part  of  the  exceptional  MFA.  The  selected  policy  measures  to  which  the 
disbursement of the assistance is  linked will be both  relevant  to  the most  critical  issues and 
proportionate to what could be achieved at the current juncture in light of the ongoing Russian 
war  of  aggression  against  Ukraine.  Through  the  reporting  system,  the  future  MoU  would 
emphasise enhanced transparency and accountability regarding the use of budgetary resources 
(including the funds received under this assistance). It could also include needs’ assessments 
to  be  addressed,  in  particular  of  critical  infrastructure  such  as  roads,  railways,  hospitals, 
schools, and housing. 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, and that have not been completed due to 
force majeure, could also be considered, where appropriate8. 

(2) 

Budgetary and risk management considerations 

This package of exceptional MFA loans must take into account the size and heightened risk 
profile  of  EU  exposures  to  Ukraine,  as  well  as  the  particular  constraints  faced  by  the  EU 
budget at the current juncture. It is however also envisaged that the loans will be provided on 
highly concessional terms (average maturity of up to 25 years), while also offering short-term 
relief to the Ukrainian State by relieving it of the burden to make interest rate repayments – at 
least  for  the  current  Multiannual  Financial  Framework  (MFF).  Taking  these  various 
considerations into account, this proposal reflects the following features: 

a.  Higher loss absorption capacity commensurate with higher credit risk 

Similar to the recent  European Parliament and  Council Decision  adopting  exceptional  MFA 
of up to EUR 1 billion in loans9, the proposed package of loans to Ukraine under the present 
circumstances presents elevated risks of potential non-repayment compared to standard MFA 
loans. The provisioning rate of 9% that is generally applied to countries facing a balance-of-
payment crisis is not  adequate  following Russia’s war of aggression. Having considered the 
challenges facing Ukraine and the probability of incurring losses, this proposal envisages that 
a  budgetary  cover  of  70%  is  needed  to  insure  the  EU  budget  against  future  contingencies. 
This high rate of provisioning is currently considered necessary to contain the risk implied by 
this  additional  exceptional  MFA  to  Ukraine,  in  line  with  the  principles  of  sound  financial 
management. 

On this basis, the 70% coverage represents a prudent and conservative risk mitigation policy 
which is  needed to  reassure investors that amounts invested in  EU bonds which finance  the 
exceptional MFA loans to Ukraine, will be repaid in full and on time. 

b.  Need to establish the required budgetary cover through Member State guarantees 

The  External  Action  Guarantee  within  the  Neighbourhood,  Development  and  International 
Cooperation Instrument – Global Europe has been designed to guarantee MFA operations of 
approximately EUR 11 billion overall, provisioned at the rate of 9%, given that MFA loans 
involve sovereign risk. On this basis, EUR 1 billion in provisions have been earmarked in the 

8 

9 

While the fulfilment of policy conditions attached to the emergency MFA has been impeded by the war 
circumstances,  the  Ukrainian  authorities  have  in  the  meantime  still  made  progress  in  implementing  
policy  conditions  attached  to  the  emergency  MFA,  like  the  recent  appointment  of  a  new  head  of  the 
Specialised Anti-corruption Prosecutor’s Office (SAPO) on 28 July. 
Decision (EU) 2022/1201 

EN 

4 

  EN 

                                                 
financial  programming  for  MFA  operations  to  third  countries  from  the  funds  provided  in 
Article 31(5), third subparagraph of Regulation (EU) 2021/947.  

The  bulk  of  this  provisioning  has  already  been  earmarked  for  MFA  loans  to  Ukraine  – 
including  the  emergency  MFA  loans  of  EUR  1.2  billion  at  9%  (EUR  108  million  of 
provisions), and the recent exceptional MFA loan of EUR 1 billion at 70% (EUR 700 million 
of  provisions).  Consequently,  the  remaining  EU  budgetary  resources  are  not  sufficient  to 
provide the budgetary cover needed to provision the additional loans of EUR 5 billion at 70% 
of their notional value. 

The proposed new MFA loans can therefore only go ahead in a financially sound manner if 
Member  States  are  willing  to  provide  the  additional  budgetary  coverage  required.  It  is 
proposed  that  this  coverage  take  the  form  of  guarantees,  with  the  amounts  pledged  by  each 
Member State calculated on a pro-rata GNI basis. Through these guarantees, the EU can call 
on amounts needed to honour its repayment commitments to the bondholders, in the event and 
to the extent required to meet a shortfall in the Common Provisioning Fund (CPF) occasioned 
by a potential payment default by Ukraine. Member States would not need to provide upfront 
provisioning in cash and the call on the guarantees would occur only in the event of payment 
defaults by Ukraine were to have depleted the dedicated provisioning that is available in the 
CCPF. Guarantees are also an appropriate response given the contingent and uncertain nature 
of  the  potential  losses.  As  indicated  above,  the  loans  would  be  structured  in  a  way  to 
maximise  the  chances  that  Ukraine  has  recovered  sufficiently  to  allow  it  to  honour  its 
repayments in full. 

The provision of Member States guarantees is a technique that has been used in the context of 
the  Support  to  mitigate  Unemployment  Risks  in  an  Emergency  (SURE)  Regulation10,  as  a 
basis for ensuring that the EU had sufficient budgetary capacity to absorb expected losses on 
its loans to Member States. However, unlike in the case of SURE, which was conditioned on 
all  guarantees  having  entered  into  force,  given  the  extreme  urgency  of  Ukraine’s  funding 
needs,  the  exceptional  MFA  loans  to  Ukraine  could  become  available  before  the  individual 
national  guarantee  agreements  between  the  Commission  and  the  Member  States  enter  into 
force if there is a firm commitment among Member States that these are forthcoming as soon 
as possible. 

c.  Maximising synergies between EU provisioning and Member State guarantees 

In  order  to  manage  optimally  situations  where  EU  budgetary  provisions  and  Member  State 
guarantees may be called upon to ensure repayments to EU bond-investors, it is proposed to 
manage  the  recent  exceptional  MFA  loan  of  EUR  1  billion,  disbursed  on  1  and  2  August 
2022,  and  the  additional  loans  of  EUR  5  billion  under  this  initiative  as  an  integrated  set  of 
exposures  for  an  amount  of  EUR  6  billion.  By  using  this  approach,  the  EU  budget  will 
provide  a  first-loss  protection  for  9  %  of  the  full  package  of  EUR  6  billion  in  loans.  This 
would  be  reinforced  by  the  Member  State  guarantees  for  a  further  61%  of  the  value  of  the 
loans.   

Managing the two sets of loans of the exceptional macro-financial assistance together in this 
way has the following implications. 

10 
Council Regulation (EU) 2020/672 of the 19 May 2020 on the establishment of a European instrument 
for  temporary  support  to  mitigate  unemployment  risks  in  an  emergency  (SURE)  following  the  COVID-19 
outbreak.  

EN 

5 

  EN 

                                                 
 

 

The planned provisions from the EU budget to be used exclusively for meeting the 
EUR 6 billion of potential claims arising from new exposures related to Ukraine will 
amount  to  EUR  540  million.  This  sizeable  amount  (to  be  increased  further  by 
provisions for repurposed ELM loans – see below) will provide a significant buffer 
for  managing  repayment  needs  in  the  event  that  Ukraine  is  unable,  temporarily  or 
otherwise, to meet its payment obligations to the EU. A buffer of this size can serve 
as  an  effective  first  layer  of  protection  in  the  event  that  Ukraine  was  to  miss 
payments  to  the  EU,  and  can  delay  the  need  to  call  on  Member  State  guarantees. 
These provisions of EUR 540 million can be held in a dedicated compartment of the 
CPF. This would allow the release of EUR 160 million of provisions from the EUR 
700  million  already  earmarked  for  the  EUR  1  billion  loan  of  the  first  part  of  the 
exceptional MFA package. 

To  bring  the  budgetary  cover  to  the  required  level  of  70%,  Member  States  should 
provide budgetary  guarantees for the remaining  61% of the full  package of EUR  6 
billion of exceptional MFA loans. The volumes to be guaranteed by Member States 
would amount to a combined total of EUR 3.66 billion. These guarantees would be 
called upon only if the amounts held as provisions in the specific compartment of the 
CPF dedicated to MFA Ukraine were to have been depleted. Member States commit 
to provide resources unconditionally and immediately in response to a Commission 
request  arising  from  a  potential  failure  of  Ukraine  to  meet  its  payment  obligations. 
Since Member States do not provide cash up-front, the budgetary guarantees agreed 
by  the  Member  States  represent  contingent  liabilities.  The  guarantees  are  a  second 
layer  of  protection  for  the  investors  in  the  EU  bonds  that  finance  the  exceptional 
MFA loans.  

This approach requires some minor changes to the text of the Decision (EU) 2022/120111 on 
the exceptional MFA loans of EUR 1 billion. This proposal presents these changes. 

d.  Coverage of interest rate costs from the EU budget  

The EU budget  may bear the interest  rate costs arising from  the  July  loan of EUR 1 billion 
under  the  current  MFF,  if  requested  by  Ukraine  and  subject  to  availability  of  budgetary 
resources.  By  assuming  the  interest  rate  costs,  the  EU  would  provide  additional  financial 
relief to Ukraine and also confine and defer the risk of potential non-repayment of principal to 
the moment of loan expiry or potential default. The Commission could arrange a loan with a 
long  maturity  (average  maturity  would  be  25  years)  in  order  to  provide  as  long  a  period  as 
possible  for  Ukraine  to  return  to  growth,  reconstruct  its  economy  in  line  with  its  European 
path and maximise the chances of full repayment. By structuring the liabilities in this way, the 
European Commission can also try to alleviate the risk of calls for part or all of the Member 
State  guarantees.  To  extend  the  same  treatment  to  the  interest  rate  costs  implied  by  the 
additional EUR 5 billion of exceptional MFA loans, additional means  need to be mobilised.  

e.  Application of a higher provisioning rate to repurposed ELM loans disbursed in Q3 

2022 and ELM loans yet to be disbursed 

Faced with Ukraine’s urgent financing needs, in July 2022 the European Commission agreed 
to repurpose EUR 1.59 billion in EIB ELM loans to Ukraine. 1.05 billion is to be disbursed by 
the EIB during the third quarter of 2022. The EIB plans to disburse another EUR 536 million 

11 

Decision  (EU)  2022/1201  of  the  European  Parliament  and  of  the  Council  of  12  July  2022  providing 
exceptional macro-financial assistance to Ukraine (OJ L 186, 13.7.2022, p. 1). 

EN 

6 

  EN 

                                                 
in  loans in  2022-23 in  order to  help  finance the  resumption of selected investment  projects. 
However, as these are loans to the Ukrainian sovereign (or guaranteed by it), they embody the 
same level of risk as the exceptional MFA loans. Under the ELM Guarantee Agreements, the 
EIB has the right to call on the EU budget for up to the full amount of losses that it incurs on 
these  loans  under  the  ELM  guarantee.  It  should  therefore  be  clarified  that  the  same 
precautionary  approach  should  apply  to  these  exposures  and  that  relevant  additional 
provisions should be put into a common compartment of the CPF dedicated to Ukraine. This 
proposal therefore envisages extending the 70% provisioning rate to these EUR 1.59 billion of 
additional exposure stemming from repurposed loans. Any further potential disbursements of 
repurposed  ELM  loans  to  Ukraine  would  be  subject  to  the  same  provisioning  rate  (as 
periodically  reviewed)  and  under  the  condition  that  budgetary  resources  are  found  for  such 
provisioning.  

The  70%  provisioning  for  the  EUR  1.59  billion  ELM  loans  will  be  provided  from  the  EU 
budget, they will be governed by the rules on provisioning of the Financial Regulation, not of 
GFEA and will be held in a separate CPF compartment.  

It  is  proposed  that  unless  the  assessment  of  associated  risks  changes,  any  further 
disbursements of ELM loans to Ukraine be conditional on finding the budgetary resource to 
provision  the  exposures  at  70%  of  their  notional  value  taking  into  account  the  priorities  of 
NDICI Global Europe Instrument. 

f.  Review of provisioning needs for MFA and ELM loans 

The  high  level  of  provisioning  in  this  proposal  is  warranted  by  the  fact  that  Ukraine  is 
currently dealing with the military, economic and social fall-out of a major armed conflict. If 
the  military  and  economic  situation  of  Ukraine  stabilises  or  improves,  this  level  of 
provisioning  may  no  longer  be  required.  This  proposal  therefore  envisages  a  regular  (6-
monthly) review of this provisioning rate, commencing in mid-2023 or earlier if appropriate. 
This  review  will  also  apply  to  the  provisioning  for  the  EUR  1  billion  loan  that  has  been 
granted  on  the  basis  of  Decision  (EU)  2022/1201,12  and  to  the  exceptional  provisioning  of 
70% held against the 1.59 billion EUR ELM repurposed loans (see below). In addition to this 
regular review, the Commission could re-assess the provisioning rate on an ad-hoc basis, in 
particular if justified by a notable relevant event. 

(1) 

Implementation of MFA loans 

The  Commission  will  arrange  to  disburse  instalments  of  the  exceptional  MFA  loans  as  a 
matter  of  urgency  after  this  proposal  has  been  adopted  and  all  formalities  have  been 
completed. These include in particular the (i) unequivocal and unanimous commitment by all 
Member  States  to  conclude  guarantee  agreements,  as  quickly  as  their  national  procedures 
allow; and (ii) the signature of the MoU and the entry into force of the Loan Agreement.  

This  proposal  envisages  that  the  European  Commission  will  proceed  to  arrange  loans 
immediately  after  this  Decision  enters  into  force,  subject  to  a  clear  and  unequivocal 
commitment  by  all  Member  States  that  guarantees  will  be  provided  as  swiftly  as  national 
procedures  allow.  Past  experience  has  shown  that  while  many  Member  States  can  provide 
guarantees within 2-3 months, it can take 4-5 months to receive the full set of guarantees. This 
would  not  be  compatible  with  the  objective  of  providing  urgent  support  to  Ukraine.  The 
Commission  therefore  envisages  –  on  an  exceptional  basis  given  the  extreme  nature  of  the 

12 

Decision  (EU)  2022/1201  of  the  European  Parliament  and  of  the  Council  of  12  July  2022  providing 
exceptional macro-financial assistance to Ukraine (OJ L 186, 13.7.2022, p. 1). 

EN 

7 

  EN 

                                                 
situation  –  to  arrange  the  loans  while  receiving  the  guarantees  in  parallel.  In  this  particular 
case, the risk for the EU budget is mitigated given that no payment event (interest payment) is 
due for a prolonged period of time. In particular, no payment events will fall due during the 
interim period (4-5 months) before all guarantees have been received.  In the theoretical case 
that non-payment events would occur in this interim period, the provisioning set aside in the 
CPF (and, if needed, temporary draw-down of other CPF compartments) can be mobilised to 
deal with any temporary shortfalls. The availability of the CPF provisioning means that there 
are  cash  resources  available  to  ensure  all  payments  owed  to  EU  bond-investors,  even  if 
guarantees are not yet fully in place. 

Therefore,  the  European  Commission  proposes  to  arrange  the  new  MFA  loans  in  a  small 
number  of  instalments  as  swiftly  as  possible  after  entry  into  force  of  this  Decision  and 
finalisation of the related Loan Agreement. It is of utmost importance that all Member States 
provide the required budgetary guarantees as quickly as possible, and that there is a collective 
commitment to complete this process swiftly. 

To deliver the full amount of up to EUR 9 billion of exceptional MFA as announced in the 
Communication  on  Ukraine  Reconstruction  and  Relief  of  18  May  2022,  the  European 
Commission  is  working  with  EU  Member  States  on  a  sound  and  equitable  mechanism  for  
disbursing  the  remaining  up  to  EUR  3  billion.  Once  the  design  has  been  completed,  the 
Commission will swiftly move ahead with a proposal on the remaining amount of support. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 212  of the Treaty  on the  Functioning of  the European Union  is  an appropriate legal 
basis  for  financial  assistance  granted  by  the  Union  to  third  countries.    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 
provide  for  a  mechanism  of  guarantees  by  the  Member  States  which  will  underpin  the 
financial  assistance.  In  the  current  circumstances,  those  guarantees  are  an  indispensable 
accompanying part of the financial assistance.  

• 

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 EU. 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,  while  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  is  restricted  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 IMF13, the amount of the proposed exceptional MFA, together with the already disbursed 
emergency  MFA,  corresponds  at  most  to  half  of  the  estimated  residual  financing  gap  for 

13 

As confirmed by the IMF to the European Commission in an assessment letter received in June 2022. 

EN 

8 

  EN 

                                                 
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. 

to  be  called  upon  only  when  required  by  exceptional 
Member  State  guarantees, 
circumstances, seems the most efficient solution from a financial perspective. It avoids having 
to find additional resources within the current MFF ceilings, where all amounts are currently 
fully deployed. It also avoids Member States having to provide additional funds ex ante but 
enables amounts to be called ex post if potential losses were to occur. 

Member States will only be  required to  make resources available under this  instrument  in  a 
restricted  set  of  circumstances  set  out  in  the  Decision.  In  particular,  they  will  not  have  to 
make cash transfers to the EU immediately but only when conditions for guarantee calls are 
met. Given that repayments can be met in a first instance from  the CPF provisions, calls on 
the guarantees are likely to be, if at all, rather infrequent and predictable. 

• 

Choice of the instrument 

Project finance or technical assistance would be neither suitable nor sufficient to address the 
broader  macro-financial  objectives  of  this  exceptional  MFA.  The  main  added  value  of  the 
exceptional  MFA  compared  to  other  EU  instruments  is  to  alleviate  the  external  financial 
constraints  swiftly  and  to  the  extent  required.  It  helps  to  ensure  a  stable  macro-financial 
framework,  including  by  promoting  a  sustained  and  more  sustainable  balance  of  payments 
and  budgetary  situation,  within  an  appropriate  framework  for  reporting  requirements  and 
policy  conditions.  By  helping  to  ensure  an  appropriate  overall  policy  framework,  the  MFA 
can  increase  the  effectiveness  of  the  measures  financed  in  Ukraine  under  other,  more 
narrowly-focused EU financial instruments. The impact on the country’s debt sustainability is 
lessened by setting up the operation in a highly concessional manner, with longer maturities 
and  a  subsidy  to  cover  interest  costs.  Swiftly  providing  the  much  needed  and  very  sizeable 
amount of financial support through the MFA’s highly concessional set-up for loans appears 
warranted, notably given the limits that he international community, including the EU, faces 
to provide substantial grant financing.  

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 conditions.  

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  complementary  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. 

There have been no recent reviews of the provisioning rates applied to the MFA and Euratom 
loan  facility  portfolios  or  the  provisioning  of  the  external  lending  mandate  budgetary 
guarantee.  The  provisioning  rate  for  the  MFA  under  the  External  Action  Guarantee  was 

EN 

9 

  EN 

reconfirmed at 9% when Regulation 2021/947 (the NDICI-GE Regulation) was adopted. The 
NDICI-GE  Regulation  also  lays  down  a  maximum  amount  of  provisioning  for  the  entire 
External Action Guarantee14. A review of the provisioning of the macro-financial assistance is 
scheduled for 2024. While the MFA is a crisis instrument by nature, the risks of lending to a 
country  at  war  goes  far  beyond  the  scenarios  envisaged  when  the  NDICI-GE  was  adopted. 
There is therefore a need to adopt tailored solutions to deal with the pressing situation at hand, 
based on available analysis. 

• 

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  (including  Member  States)  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. This includes discussions on regular basis of the latest 
projections of the funding needs projections of Ukraine within international fora, e.g. the G7. 

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  IMF).  The  situation  of  the  EU,  which  has  financed  MFA  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  defaulted  payment  flows  from  the  loan  beneficiaries.  In  order  to  be  able  to 
provide fast and further MFA of an exceptionally large size to a single beneficiary under the 
present circumstances, while maintaining its funding model, the Union needs to reinforce the 
Common Provisioning Fund by additional guarantees by the Member States that would act as 
a back-stop to the 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  Russian  war  of 
aggression against Ukraine. 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 MFA. 

14 

The  External  action  guarantee  covers  the  EFSD+  operations  covered  by  budgetary  guarantees  in 
accordance,  macro-financial  assistance  and  loans  to  third  countries  referred  to  in  Article  10(2)  of 
Regulation (Euratom) 2021/948. Article 31(4) of the NDICI-GE Regulation sets the maximum amount 
of operations under the External action guarantee at EUR 53 448 800 000 and the maximum amount of 
provisioning at EUR 10 000 000. 

EN 

10 

  EN 

                                                 
• 

Impact assessment 

The  Union’s  MFA  is  an  exceptional  emergency  instrument  aimed  at  addressing  severe 
balance-of-payment  difficulties  in  third  countries.  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  exceptional MFA will help alleviate the short-term financing 
needs of Ukraine in the current extraordinary circumstances. The reporting requirements and 
policy conditions linked to this exceptional MFA aim to ensure the efficiency, transparency, 
and accountability of the support. This 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 does not require an Impact Assessment, as macro-financial assistance is the only 
available policy option to address the issue at hand. The use of additional guarantees 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 EUR 5 billion exceptional MFA to Ukraine will be borrowed in the capital 
markets and on-lent to Ukraine. This will complement the EUR 1 billion exceptional MFA to 
Ukraine granted under Decision (EU) 2022/1201.  

To protect the Union budget, the two exceptional MFA loans of  an overall amount of up to 
EUR  6  billion  to  Ukraine  should  benefit  from  a  70%  coverage  composed  by  paid-in 
provisioning of 9% and callable guarantees from Member States of 61%. The required paid-in 
provisioning (at a rate of 9% of the External Action Guarantee) will be earmarked under the 
NDICI-GE, for a total  amount of EUR 540 million (budget  line 14 02 01 70 “NDICI-GE  – 
Provisioning  of  the  Common  Provisioning  Fund”).  The  scope  for  mobilising  budgetary 
resources  for  this  additional  provisioning  above  the  9%  under  the  current  MFF  ceilings  is 
however limited. Recourse to guarantees by the Member States is needed in order to be able 
to provide further MFA loans to Ukraine in a sound budgetary manner and without disrupting 

EN 

11 

  EN 

the  implementation  of  MFF  2021-2027.  This  is  the  rationale  for  the  proposal  that  Member 
States  provide  guarantees  for  a  further  61%  of  the  value  of  the  proposed  EUR  6  billion  in 
loans. 

The overall coverage would thus benefit from a first loss protection with paid-in provisioning 
of  9%  of  the  EUR  6  billion,  followed  by  complementary  guarantees  by  Member  States 
covering exposures up to EUR 3.66 billion, or 61% of the EUR 6 billion of MFA loans and in 
line  with  the  applicable  legislation,  any  residual  amounts  would  be  covered  by  the  Union 
budget as a contingent liability.  

The  exceptional  macro-financial  assistance  to  Ukraine  under  this  Decision  will  be  arranged 
directly upon entry into force of this Decision, and without waiting for receipt of the required 
national guarantees. 

Given the urgent need to arrange loans for Ukraine in the course of 2022, the EU will arrange 
the loans before Member States’ guarantees are in place. Past experience has shown that while 
many  Member  States  can  provide  guarantees  within  2-3  months,  it  can  take  4-5  months  to 
receive the full  set  of  guarantees. Delays of this duration cannot  be  countenanced  given the 
extreme urgency of the Ukrainian financing needs. The Commission therefore envisages – on 
an  exceptional  basis  given  the  extreme  nature  of  the  situation  –  to  arrange  the  loans  while 
receiving the guarantees in parallel.  

During  this  interim  period,  investors  in  EU  bonds  incur  no  risk  of  non-payment  by  the  EU 
during the short period before all guarantees are received because of the way that the present 
loan package has been constructed. In particular, no payments events will fall due during the 
interim  period  (4-5  months)  before  all  guarantees  are  expected  to  be  received.  In  the 
theoretical scenario that a non-payment were to occur in the period before all guarantees are 
received, the European Commission could draw on the provisions set aside for the MFA loans 
and, if needed, other provisions held in the EU’s Common Provisioning Fund. 

Member  States  should  complete  their  national  procedures  for  the  guarantees  to  enter  into 
force as a matter of the utmost urgency.  

 The guarantees would cover amounts going beyond the initial paid-in provisioning of 9% of 
the loan amount under this Decision and Decision (EU) 2022/1201, which would be provided 
from  the  MFF  as  foreseen  in  Article  31(5)  of  the  NDICI-GE  Regulation  and  the  financial 
programming. The calls will be confined to situations of non-payment by Ukraine on the loan 
under the current Decision and under Decision (EU) 2022/1201 and would be used to satisfy 
Union’s obligations in the first place and, as appropriate, to replenish  the dedicated Ukraine 
related compartment in the Common Provisioning Fund. Such contributions would be taken 
into account for calculating the provisioning resulting from the provisioning rate referred to in 
Article  211(1)  of  the  Financial  Regulation,  by  derogation  from  second  subparagraph  of 
Article 211(4) of the Financial Regulation.  

The  amounts  called  from  the  Member  States  would  constitute  external  assigned  revenue 
within the meaning of Article 21(2)(a)(ii) of the Financial Regulation to provide contributions 
by Member States for provisioning for MFA, which is an external aid programme guaranteed 
under the NDICI-GE. 

Given the exceptional nature of the macro-financial assistance backed by the guarantees it is 
appropriate  to  cover  the  financial  liability  from  the  MFA  under  this  Decision  and  under 
Decision (EU) 2022/1201 separately from other financial liabilities under the External Action 

EN 

12 

  EN 

Guarantee.  In  particular,  it  is  appropriate  to  use  the  provisioning  set  aside  in  the  CPF  in 
respect of this MFA solely for financial liabilities under this Decision, instead of the general 
rule of Article 31(6) of the NDICI-GE regulation. 

The  same  risk  considerations  apply  to  ELM  loans  disbursed  or  to  be  disbursed  by  the  EIB 
after 15 July 2022. This proposal therefore envisages extending the 70% provisioning rate to 
those  loans,  application  of  the  rules  on  provisioning  of  the  Financial  Regulation,  and  not 
GFEA rules and provides that the provisions should be kept in a separate compartment of the 
CPF.  

In addition, an interest rate subsidy should be provided as described below, to be borne by the 
envelope referred to in the first indent of point (a) of Article 6(2) of the NDICI-GE 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 

The European Union shall make this exceptional MFA available to Ukraine for a total amount 
of  EUR  5  billion  in  the  form  of  long-term  loans.  This  assistance,  which  is  planned  to  be 
disbursed  in  several  instalments,  will  contribute  to  covering  the  residual  external  financing 
gap of Ukraine in 2022. The first instalment will be paid after the approval of this proposal 
and  the  entry  into  force  of  the  corresponding  MoU,  and  as  soon  as  Member  States 
unanimously signal  their agreement to  complete  their national  procedures  for submission  of 
national guarantees as a matter of the utmost urgency. 

The  disbursement  would  further  be  conditional  on  the  implemention  of  the  reporting 
requirements as agreed in the MoU. 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. 

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.  

• 

Explanatory documents (for directives) 

Not applicable  

• 

Detailed explanation of the specific provisions of the proposal 

The  decision  will  also  provide  for  a  framework  for  guarantees  by  Member  States  to  cover 
losses  going  beyond  the  provisioning  already  paid  into  the  CPF  or  foreseen  in  the  financial 
programming of MFF 2021-27. 

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

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

Article 3 provides for clearly defined reporting and monitoring requirements, as well as policy 
conditions to which this Union's exceptional macro-financial assistance is to be linked. These 
requirements and conditions shall be set out in a Memorandum of Understanding.  

EN 

13 

  EN 

Article  4  provides  for  the  conditions  necessary  for  the  disbursement  of  this  exceptional 
macro-financial  assistance  in  multiple  instalments.  The  timeframe  and  conditions  for  the 
disbursement of each instalment shall be laid down in the Memorandum of Understanding.    

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

Article 6 explains the financing of the interest rate subsidy. 

Article  7  presents  the  reporting  obligations  of  the  Commission  before  the  European 
Parliament  and  the  Council,  during  the  implementation  of  this  exceptional  macro-financial 
assistance to Ukraine.  

Article  8  provides  details  on  the  assessment  of  implementation  of  the  exceptional  macro-
financial assistance.  

Article 9 provides for the establishment of national guarantees for an overall amount of EUR 
3.66 billion by the Member States.  

Article 10 provides details on the guarantee agreements that the Commission shall conclude 
with the Member States. 

Article 11 describes the provisioning with respect to the covered MFAs.   

Article 12 provides for reinforcing the provisioning with respect to some financial liabilities 
in Ukraine guaranteed under Decision No 466/2014/EU. 

Article  13  provides  for  an  assessment  of  the  adequacy  of  provisioning  and  for  a  review 
procedure. 

Article 14 provides accounting details on the provisioning held in the Common Provisioning 
Fund. 

Article  15  stipulates  that  a  Committee  shall  assist  the  Commission,  in  accordance  with 
Comitology procedures. 

Article 16 details the exercise of delegation. 

Article  17  presents  the  reporting  obligations  of  the  Commission  before  the  European 
Parliament  and  the  Council  during  the  implementation  of  this  exceptional  macro-financial 
assistance to Ukraine. 

Article 18 contains the amendments to Decision (EU) 2022/1201. 

Article 19 clarifies the date of entry into force of this Decision. 

EN 

14 

  EN 

2022/0281 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

providing exceptional macro-financial assistance to Ukraine, reinforcing the Common 
Provisioning Fund by guarantees by the Member States and by specific provisioning for 
some financial liabilities related to Ukraine guaranteed under Decision No 466/2014/EU, 
and amending Decision (EU) 2022/1201 

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 procedure15, 

Whereas: 

(1) 

(2) 

An  association  agreement  between  the  Union  and  Ukraine16 (the  ‘Association 
Agreement’),  including  a  Deep  and  Comprehensive  Free  Trade  Area  (DCFTA), 
entered into force on 1 September 2017. 

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 
consecutive  macro-financial  assistance  programmes,  under  which  Ukraine  has 
received assistance in the form of loans for a total of EUR 6.6 billion. The 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  Council17,  provided  EUR  1.2  billion  in  loans  to 
Ukraine, disbursed in  two instalments  of EUR 600 million  in  March and May  2022. 
The exceptional MFA of up to EUR 1 billion pursuant to Decision (EU) 2022/1201 of 
the European Parliament and of the Council18 provided swift and urgent support to the 
Ukrainian budget and was fully disbursed on 1 and 2 August 2022. It represented the 
first part of the exceptional MFA package to Ukraine announced by the Commission 
in  its  Communication  “Ukraine:  Relief  and  Reconstruction”  of  18  May  2022  and 
endorsed  by  the  European  Council  of  23-24  June  2022.  This  Decision  constitutes  a 

15 

16 

17 

18 

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). 
Decision  (EU)  2022/1201  of  the  European  Parliament  and  of  the  Council  of  12  July  2022  providing 
exceptional macro-financial assistance to Ukraine (OJ L 186, 13.7.2022, p. 1). 

EN 

15 

  EN 

                                                 
(3) 

(4) 

(5) 

(6) 

second  stage  in  the  delivery  of  the  commitment  to  provide  up  to  EUR  9  billion  in 
MFA  assistance  to  Ukraine.  It  establishes  the  basis  for  providing  a  further  EUR  5 
billion in MFA loans on highly concessional terms. It should be followed swiftly by a 
third  package  of  financial  assistance  for  up  to  a  further  EUR  3  billion  once  the 
appropriate modalities have been determined. 

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 
financing  needs  by  the  International  Monetary  Fund  point  to  an  extraordinary 
financing gap of around USD 39 billion in 2022 of which around half could be met if 
the  international  support  pledged  thus  far  would  be  fully  disbursed.  The  swift 
provision  by  the  Union  of  this  second  stage  in  the  exceptional  macro-financial 
assistance  package  to  Ukraine  is,  under  the  current  extraordinary  circumstances, 
considered to be an appropriate short-term response to the sizeable risks to the macro-
financial  stability  of  the  country.  This  further  EUR  5  billion  in  exceptional  macro-
financial assistance would support Ukraine’s macro-financial stabilisation, strengthen 
the  immediate  resilience  of  the  country  and  sustain  its  capacity  towards  recovery, 
thereby  contributing  to  the  public  debt  sustainability  of  Ukraine  and  its  ability  to 
ultimately be in a position to repay its financial obligations. 

This  new  round  of  exceptional  macro-financial  assistance  will  make  a  significant 
contribution  to  the  financing  of  Ukraine’s  funding  needs  as  estimated  by  the 
International  Monetary  Fund  (IMF)  and  other  international  financial  institutions, 
taking  into  account  its  capacity  to  finance  itself  with  its  own  resources.  The 
determination  of  the  amount  of  the  assistance  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.  Such  a 
programme was formally requested in August 2022. The Union’s exceptional macro-
financial  assistance  should  aim  to  maintain  macro-financial  stability  and  resilience 
under  the  circumstances  of  the  Russian  war  of  aggression.  The  Commission  should 
ensure  that  the  Union’s  exceptional  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  exceptional  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. 

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

EN 

16 

  EN 

(7) 

(8) 

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  exceptional  macro-financial  assistance  should  be  linked  to  reporting 
requirements and policy conditions, to be set out in a memorandum of understanding 
(MoU). The robust reporting requirements aim, under the current circumstances of the 
Russian war of aggression against Ukraine, to ensure the efficiency, transparency and 
accountability  of  the  use  of  the  funds.  The  policy  conditions  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.  

(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.19 

(10)  The  maximum  average  maturity  of  the  loans  under  this  Decision  and  Decision  (EU) 

2022/1201 should be 25 years. 

(11)  Given that the loans under this Decision and Decision (EU) 2022/1201 imply the same 
risks for the EU budget  and should have the common maximum average maturity of 
25 years, the aggregate amount of the macro-financial assistance under this Decision 
and  Decision  (EU)  2022/1201  to  Ukraine  of  EUR  6  billion  should  be  covered  by  a 
common  methodology  for  managing  the  financial  and  budgetary  implications.  In 
particular,  the  same  level  of  budgetary  cover  should  be  established  as  adequate 
protection against the possibility of potential non-repayment by Ukraine of some or all 
of the loans at the scheduled time. The provisions made available from the EU budget 
against the two sets  of loans of the exceptional  macro-financial  assistance should be 
managed  as  an  integrated  set  of  provisions.  This  will  enhance  the  resilience  and 
flexibility of the EU budget in response to any situation of non-payment.  Article 7(2) 
of Decision (EU) 2022/1201 should therefore be amended accordingly. 

(12)  The  exceptional  macro-financial  assistance  under  this  Decision  and  Decision  (EU) 
2022/1201 constitutes a financial liability for the Union within the overall volume of 
the External Action Guarantee. The total amount of up to EUR 6 billion of exceptional 
macro-financial  assistance  loans  to  Ukraine  should  benefit  from  9%  of  paid-in 
provisioning available for macro-financial assistance loans under the External Action 
Guarantee.  The  amount  of  provisioning  should  be  financed  from  the  envelope 
programmed  for  macro-financial  assistance  under  Regulation  (EU)  2021/947  of  the 
European Parliament and of the Council20 for a total amount of provisioning of EUR 

19 

20 

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). 
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. 

EN 

17 

  EN 

                                                 
(13) 

(14) 

540  million.  This  amount  should  be  committed  and  paid  into  the  Common 
Provisioning Fund under the MFF 2021-27.  

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),  Euratom2020/209321 
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, Euratom22. In order to enable the Union to provide substantial 
support  to  Ukraine  through  MFA  in  unprecedented  amounts  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,  the  Common 
Provisioning  Fund  should  be  reinforced  by  means  commensurate  to  the  risks  arising 
from  the  contingent  liabilities  linked  to  this  unprecedently  large  macro-financial 
assistance  to  a  single  beneficiary.  Without  such  reinforcement,  the  Union  budget 
would not  be able to  provide, on financially safe grounds,  the unprecedentedly large 
assistance that the war-related needs of Ukraine request. To protect the Union budget, 
the exceptional  MFA loans of up to  EUR 6  billion to  Ukraine should benefit  from  a 
70%  coverage  through  paid-in  provisioning  (at  the  level  of  9%)  supplemented  with 
national guarantees to provide budgetary cover for losses of up to a further 61% of the 
loan values. 

(15)  Resources under Regulation (EU, Euratom) 2020/2093 are under high pressure in view 
of  the  Union’s  overall  spending  priorities.  It  is  therefore  appropriate  to  seek  an 
alternative  solution  for  additional  resources  which  does  not  affect  the  regular 
expenditure foreseen in the financial programming of the MFF 2021-27.  

(16)  Contributions by Member States in the form of guarantees have been identified as an 
appropriate tool to provide the protection on top of the initial paid-in provisioning. The 
Member  States  guarantees  should  be  provided  voluntarily  and  should  constitute  an 
appropriate  backstop  supporting  the  Union’s  budget,  should  the  provisions  in  the 
Common  Provisioning  Fund  (CPF)  in  respect  of  financial  liabilities  under  this 
Decision  and  Decision  (EU)  2022/1201  be  depleted.  The  contributions  under  these 
guarantees  should  be  included  into  the  amount  of  authorised  financial  liability 
by derogation to  the first subparagraph of Article 211(1) of the Financial Regulation. 
Those amounts should be taken into account for calculating the provisioning resulting 
from the provisioning rate referred to in Article 211(1) of the Financial Regulation, by 
derogation to the second subparagraph of Article 211(4) of the Financial Regulation.  

(17)  The  guarantees  provided  by  the  Member  States  should  cover  the  exceptional  MFA 
loan  under  this  decision  and  the  exceptional  MFA  loan  of  EUR  1  billion  under 

21 

22 

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). 

EN 

18 

  EN 

                                                 
Decision (EU) 2022/1201. They should be irrevocable, unconditional and on demand. 
These  guarantees  should  ensure  Union’s  ability  to  repay  the  funds  borrowed  in  the 
capital  markets  or  from  the  financial  institutions.  They  should  be  called  only  when 
strict conditions,  relating  to  the adequacy of the  available provisions, are met  and in 
case  the  Union  would  not  receive  a  payment  from  Ukraine  of  the  macro-financial 
assistance loans granted under this Decision and Decision (EU) 2022/1201 in time for 
satisfying  the  Union’s  financial  obligations  from  bonds  or  in  case  the  payment 
schedule of the loans granted under this Decision and Decision (EU) 2022/1201 were 
to  be  modified.  A  call  on  the  Member  States’  guarantees  should  be  made  for  an 
amount  corresponding  to  the  amount  arising  from  losses  on  financial  assistance  to 
Ukraine  under  this  Decision  and  Decision  (EU)  2022/1201  and  to  replenish  the 
Common  Provisioning  Fund  to  the  required  level  of  paid  in  provisioning.  The  calls 
under the Member States’ guarantees should only be made after the amount of initial 
provisioning  set  aside in  respect  of the MFA under this Decision  and Decision (EU) 
2022/1201  has  been  or  is  to  be  exhausted.  Amounts  recovered  under  the  loan 
agreements  in  respect  of  the  financial  assistance  to  Ukraine  under  this  Decision  and 
Decision  (EU)  2022/1201  should  be  reimbursed  to  the  Member  States  who  have 
honoured  the  guarantee  calls,  by  derogation  from  Article  211(4)(c)  of  the  Financial 
Regulation. 

(18) 

In  the  event  that  payment  of  Union’s  financial  obligations  arising  from  bonds  for 
macro-financial  assistance  to  Ukraine  under  this  Decision  and  Decision  (EU) 
2022/1201  were  met  temporarily  from  provisions  set  aside  in  the  Common 
Provisioning  Fund  to  cover  other  financial  liabilities  of  the  Union,  the  call  on  the 
guarantees of the Member States could be used to replenish the provisioning of those 
financial liabilities.  

(19)  Given  the  exceptional  nature  of  the  macro-financial  assistance  backed  by  the 
guarantees,  it  is  appropriate  to  manage  the  provisions  held  against  the  financial 
liabilities  arising  from  the  macro-financial  assistance  under  this  Decision,  Decision 
(EU)  2022/1201  and  for  any  disbursements  after  15  July  2022  of  loans  guaranteed 
under  Decision  No  466/2014/EU  of  the  European  Parliament  and  of  the  Council23 
separately from other financial liabilities under the External Action Guarantee and the 
Guarantee  Fund for  External  Action.  It  is  therefore proposed  to  use the provisioning 
set  aside  in  the  Common  Provisioning  Fund  solely  for  financial  liabilities  from  the 
macro-financial  assistance  covered  by  this  Decision  and  Decision  (EU)  2022/1201, 
instead  of  the  general  rule  in  Article  31(6)  of  the  NDICI-GE  regulation.24  It  is  also 
proposed  to  use  the  provisioning  set  aside  in  the  Common  Provisioning  Fund  in 
respect  of  the  loans  guaranteed  under  Decision  No  466/2014/EU  disbursed  after  15 
July 2022 solely for the financial liabilities from those loans and to apply the rules of 
the  Financial  Regulation  to  the  provisioning,  instead  of  the  general  rule  in  Article 
31(8) of the NDICI-GE regulation. This should be complemented by exclusion of the 
provisioning set aside in respect of this macro-financial assistance from the application 

23  Decision No 466/2014/EU of the European Parliament and of the Council of 16 April 2014 granting an EU 
guarantee to the European Investment Bank against losses under financing operations supporting investment 
projects outside the Union (OJ L 135, 8.5.2014, p. 1). 

24  Regulation  (EU)  2021/947 of  the  European  Parliament  and  of  the  Council  of  9  June  2021  establishing  the 
Neighbourhood,  Development  and  International  Cooperation  Instrument  –  Global  Europe,  amending  and 
repealing Decision No 466/2014/EU and repealing Regulation (EU) 2017/1601 and Council Regulation (EC, 
Euratom) No 480/2009Regulation 2021/947 (OJ L209, 14.06.2021, p. 1). 

EN 

19 

  EN 

                                                 
of  the  effective  provisioning  rate,  by  derogation  from  Article  213  of  the  Financial 
Regulation. 

(20)  The relative share of the contributions of each Member State (contribution key) to the 
overall guaranteed amount should correspond to the relative shares of Member States 
in the total gross national income of the Union. The calls on the guarantee should be 
made pro rata and be based on that contribution key.  

(21)  Member States should complete  their national  procedures  for the  guarantees to  enter 
into force as a matter of the utmost priority. Given the urgency of situation, the time 
needed  for  the  completion  of  those  procedures  should  not  delay  the  disbursement  of 
the  urgently  needed  exceptional  macro-financial  assistance  to  Ukraine  under  this 
Decision. The additional MFA loans under this Decision will be arranged swiftly upon 
entry into force of this Decision, adoption of the Memorandum of Understanding and 
signature of the Loan Agreement.  

(22)  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  and  waive  to  Ukraine  the  administrative 
costs. The interest rate subsidy should be 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  at  least  during  the 
present MFF cycle. During the period 2021 to 2027 it should be borne by the envelope 
referred to in the first indent of Article 6(2), point (a) of Regulation (EU) 2021/947.  

(23)  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. 

(24)  Faced  with  the  urgent  financing  needs  of  Ukraine,  the  European  Commission  has 
agreed in July 2022 to the repurposing and disbursement of a further EUR 1.59 billion 
in  EIB  loans  to  Ukraine  guaranteed  under  the  External  Lending  Mandate  2014-20 
(ELM).  However,  as  these  are  loans  for  the  Ukrainian  sovereign  and  state-owned 
entities, they embody the same level of risk for the EU budget as the MFA loans. The 
EU  budget  should  consequently  apply  the  same  precautionary  approach  to  these 
exposures  as  it  does  to  the  new  MFA  loans.  This  Decision  therefore  applies  a  70% 
provisioning rate to the 1.59 billion of repurposed ELM loans as well as to any further 
disbursements of ELM loans to Ukraine. That provisioning rate should apply instead 
of the provisioning rate resulting from the third sentence of paragraph 8 of Article 31 
of  Regulation  (EU)  2021/947.  The  70%  provisioning  for  the  EUR  1.59  billion  ELM 
loans disbursements to Ukraine will be financed by the EU budget.  

(25)  A regular review of the provisioning for the respective MFAs and ELM loans should 
be  undertaken  every  six  months,  commencing  in  mid-2023  or  earlier  if  appropriate. 
This review should in particular assess whether the situation of Ukraine has evolved in 
a  way  that  would  warrant  an  increase  or  decrease  of  the  provisioning  rate.  The 
Commission might re-assess the provisioning rate on an ad-hoc basis, in particular if 
justified  by  a  notable  relevant  event.  In  order  to  ensure  that  the  provisioning  rate 
remains  adequate  to  the  financial  risks,  the  power  to  adopt  acts  in  accordance  with 
Article  290  of  the  Treaty  on  the  Functioning  of  the  European  Union  should  be 
delegated to the Commission in respect of the provisioning rate where an increase or 

EN 

20 

  EN 

decrease  of  the  provisioning  rate  is  warranted.  It  is  of  particular  importance  that  the 
Commission carry out appropriate consultations during its preparatory work, including 
at  expert  level,  and  that  those  consultations  be  conducted  in  accordance  with  the 
principles laid down in the Interinstitutional Agreement on Better Law-Making of 13 
April 2016. In particular, to ensure equal participation in the preparation of delegated 
acts, the European Parliament and the Council receive all documents at the same time 
as Member States' experts, and their experts systematically have access to meetings of 
Commission expert groups dealing with the preparation of delegated acts. 

(26)  Since  the  objective  of  this  Decision,  namely  to  provide  exceptional  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. 

(27) 

In view of the urgency entailed by the exceptional circumstances caused by Russia’s 
unprovoked  and  unjustified  military  aggression,  it  is  considered  to  be  appropriate  to 
provide for an exception to the eight-week period referred to in Article 4 of Protocol 
No 1 on the role of national Parliaments in the European Union, annexed to the TEU, 
to the Treaty on the Functioning of the European Union and to the Treaty establishing 
the European Atomic Energy Community.  

(28)  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. 

HAVE ADOPTED THIS DECISION:  

Chapter I 

Exceptional macro-financial assistance 

Article 1 

1. 

2. 

3. 

Making available of the Union’s exceptional macro-financial assistance 

The  Union  shall  make  available  to  Ukraine  exceptional  macro-financial  assistance 
for  a  maximum  amount  of  EUR  5  000  000  000  (the  ‘Union’s  exceptional  macro-
financial assistance’) 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 
loans.  The  assistance  shall  contribute  to  covering  Ukraine’s  financing  gap  as 
identified in cooperation with the international financial institutions. 

In  order  to  finance  the  Union’s  exceptional  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  loans  under  paragraph  1  and  under  Decision  (EU)  2022/1201  shall 
together have a maximum average maturity of 25 years. 

The Union’s exceptional macro-financial assistance shall be made available starting 
on  the  first  day  after  the  entry  into  force  of  the  Memorandum  of  Understanding 
referred to in Article 3(1) and during the availability period defined therein, even if 

EN 

21 

  EN 

the  guarantees  set  out  in  Chapter  II,  Section  1,  of  this  Decision  have  not  yet  been 
provided. 

If  the  financing  needs  of  Ukraine  decrease  fundamentally  during  the  period  of  the 
disbursement of the Union’s exceptional macro-financial assistance compared to the 
initial projections, the Commission shall reduce, suspend or cancel the amount of the 
assistance. 

Article 2 

Precondition for the macro-financial assistance 

A precondition for granting the Union’s exceptional 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 shall monitor the fulfilment of the precondition set out in paragraph 
1 throughout the life-cycle of the Union’s exceptional 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. 

Paragraphs 1 and 2 of this Article shall apply in  accordance with Council Decision 
2010/427/EU25. 

Article 3 

Memorandum of Understanding 

The Commission shall agree with Ukraine on policy conditions to which the Union’s 
exceptional macro-financial assistance is to be linked. The policy conditions shall be 
adopted  in  accordance  with  the  examination  procedure  referred  to  in  Article  14(2). 
Those policy conditions shall be set out in a Memorandum of Understanding. 

The reporting requirements that were adopted in the context of the first part of this 
exceptional MFA shall be included in the Memorandum of Understanding and shall 
ensure, in particular, the efficiency, transparency and accountability of the use of the 
Union’s exceptional macro-financial assistance. 

The  detailed  financial  terms  of  the  Union’s  exceptional  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 
reporting requirements and the progress made towards fulfilling the policy conditions 
agreed  in  the  Memorandum  of  Understanding.  The  Commission  shall  inform  the 
European Parliament and the Council about the results of that verification. 

Article 4 

Release of the exceptional macro-financial assistance 

Subject  to  the  requirements  referred  to  in  paragraph  3,  the  Union’s  exceptional 
macro-financial assistance shall be made available by the Commission in instalments 

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). 

4. 

1. 

2. 

3. 

1. 

2. 

3. 

4. 

1. 

25 

EN 

22 

  EN 

                                                 
each of which shall consist of a loan. The Commission shall decide on the timeframe 
for the disbursement of each  instalment. An instalment  may be disbursed in  one or 
more tranches. 

The release of the Union’s exceptional macro-financial assistance shall be managed 
by  the  Commission  in  a  manner  consistent  with  the  agreements  or  understandings 
reached  between 
the  Memorandum  of 
Understanding referred to in Article 3(1). 

the  Commission  and  Ukraine 

in 

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

(a) 

(b) 

(c) 

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

the satisfactory implementation of the reporting requirements as agreed in the 
Memorandum of Understanding; 

for  the  second  and  subsequent  instalments,  satisfactory  progress  towards  the 
implementation  of  the  policy  conditions  agreed  in  the  Memorandum  of 
Understanding. 

Before  the  maximum  amount  of  the  macro-financial  assistance  is  disbursed,  the 
Commission  shall  verify  the  fulfilment  of  all  the  policy  conditions  agreed  in  the 
Memorandum of Understanding. 

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

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

Article 5 

Borrowing and lending operations  

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

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. 

Article 6 

Interest rate subsidy 

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

2. 

3. 

4. 

5. 

1. 

2. 

1. 

2. 

EN 

23 

  EN 

3. 

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 as interest rate subsidy. 

Article 7 

Information to the European Parliament and the Council 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of  developments 
regarding the Union’s exceptional macro-financial assistance, including disbursements thereof 
and developments in the operations referred to in paragraphs 2 and 3 of Article 5, and shall 
provide those institutions with the relevant documents in due time. 

Assessment of implementation of the exceptional macro-financial assistance 

Article 8 

During the implementation of the Union’s macro-financial assistance, the Commission shall 
re-assess,  by  means  of  an  operational  assessment,  the  soundness  of  Ukraine’s  financial 
arrangements, 
internal  and  external  control 
mechanisms  which  are  relevant  to  the  assistance.  This  operational  assessment  can  be 
conducted together with the one provided for under Decision (EU) 2022/1201. 

the  administrative  procedures,  and 

the 

Chapter II 

Reinforcement of the Common Provisioning Fund  

Section 1 

Guarantees by the Member States for the Union´s exceptional macro-financial 

assistance under this Decision and Decision (EU) 2021/1201 

1. 

2. 

3. 

4. 

Article 9 

Contributions in the form of guarantees by Member States 

Member  States  may  complement  the  provisioning  in  respect  of  macro-financial 
assistance kept in the Common Provisioning Fund, by providing guarantees up to the 
total  amount  of  EUR  3  660  000  000  in  respect  of  the  Union’s  exceptional  macro-
financial assistance to Ukraine under Article 1 of this Decision and under Decision 
(EU) 2022/1201 (ʻcovered MFAsʼ). 

Where contributions from the Member States are made, they shall be provided in the 
form  of  irrevocable,  unconditional  and  on-demand  guarantees  through  a  guarantee 
agreement concluded with the Commission, in accordance with Article 10.  

The  relative  share  of  the  contribution  of  the  relevant  Member  State  to  the  amount 
referred to in paragraph 1 shall correspond to the relative share of that Member State 
in the total gross national income of the Union, as resulting from column (1) of Table 
4 of Part A (‘Financing of the Union’s annual budget, Introduction’) of the heading 
General Revenue of the budget for 2022 set out in the general budget of the Union 
for the financial year 2022, as adopted on 24 November 2021. 

The guarantees shall become effective in respect of each Member State as of the date 
of entry into force of the guarantee agreement referred to in Article 10 between the 
Commission and that Member State.  

EN 

24 

  EN 

Article 10 

Guarantee agreements 

The Commission shall conclude a guarantee agreement with each Member State providing a 
guarantee  pursuant  to  Article  9.  That  agreement  shall  set  out  the  rules  governing  the 
guarantee, which shall be the same for all Member States, including, in particular, provisions:  

(b) 

(c) 

(d) 

(e) 

(f) 

establishing the obligation of the Member States to honour guarantee calls made by 
the Commission in respect of the covered MFAs, once the overall amounts of initial 
provisioning  set  aside  in  the  Common  Provisioning  Fund  in  respect  of  financial 
liability arising from the covered MFAs have been or are to be drawn down;  

ensuring  that  the  guarantee  calls  shall  be  made  pro  rata  and  shall  be  based  on  the 
contribution key referred to in Article 9(3);  

providing  that  the  guarantee  calls  ensure  the  Union’s  ability  to  repay  the  funds 
borrowed,  pursuant  to  Article  1(2),  in  the  capital  markets  or  from  financial 
institutions  following  a  non-payment,  even  expected,  by  Ukraine,  which  includes 
cases of modification of a payment schedule for whatsoever reason; 

ensuring that the guarantee calls may be used to replenish the Common Provisioning 
Fund for provisioning that has been drawn down in respect of the covered MFAs;  

ensuring that a Member State who has failed to honour a call shall remain liable to 
honour it; 

(g) 

regarding the payment conditions. 

Section 2 

Provisioning of the covered MFAs and of some ELM financial liabilities in Ukraine 

Article 11 

Provisioning of the covered MFAs  

1. 

2. 

3. 

4. 

For the covered MFAs, a provisioning rate of 70% shall apply instead of the general 
rule  set  out  in  Article  31(5),  third  subparagraph  of  Regulation  (EU)  2021/947.  
However, the level of provisioning paid into the Common Provisioning Fund shall be 
kept at, and if used replenished to, 9% of the outstanding liability from the covered 
MFAs until the guarantees referred to in Article 9 are fully drawn on. 

Amounts  resulting  from  calls  on  the  guarantees  referred  to  in  Article  10  shall 
constitute  external  assigned  revenue  for  the  repayment  of  financial  liabilities  from 
the covered MFAs  and  payments to  the Common Provisioning Fund in  accordance 
with Article 21(2), point (a)(ii) of Regulation (EU, Euratom) 2018/1046. 

By way of derogation from the second sentence of the first subparagraph of Article 
211(1)  of  the  Financial  Regulation,  the  amount  of  guarantees  referred  to  in  Article 
9(1)  shall  be  included  into  the  amount  of  authorised  financial  liability.  By  way  of 
derogation  from  the  second  subparagraph  of  Article  211(4)  of  the  Financial 
Regulation,  the  amounts  of  provisioning  referred  to  in  paragraph  2  of  this  Article 
shall  be  taken  into  account  for  calculating  the  provisioning  resulting  from  the 
provisioning rate in respect of covered MFAs. 

By  way  of  derogation  from  Article  211(4)(c)  of  the  Financial  Regulation,  amounts 
recovered from Ukraine  in  respect  of the  covered MFAs shall not  contribute to  the 
provisioning  up  to  the  amount  of  the  guarantee  calls  honoured  by  Member  States 

EN 

25 

  EN 

pursuant  to  Article  10(a).  Those  amounts  shall  be  reimbursed  to  those  Member 
States. 

Article 12 

Reinforcement of provisioning in respect to some financial liabilities in Ukraine 
guaranteed under Decision No 466/2014/EU 

By way of derogation from the third sentence  of Article 31(8) of Regulation (EU) 2021/947, 
the provisioning rate of 70% shall apply to loan amounts disbursed after 15 July 2022 under 
European  Investment  Bank  financing  operations  in  Ukraine  signed  by  the  European 
Investment  Bank  before  31  December  2021  and  guaranteed  by  the  EU  in  accordance  with 
Decision No 466/2014/EU (“covered ELM financial liabilities in Ukraine”) and Articles 211, 
212  and  213  of  the  Financial  Regulation  shall  apply,  subject  to  Articles  13  and  14  of  this 
Decision.  For  the  purposes  of  the  second  subparagraph  of  Article  211(1)  of  the  Financial 
Regulation, the provisioning shall reach by 31 December 2027 the level corresponding to the 
provisioning  rate  applied  to  the  total  amount  of  outstanding  liabilities  from  covered  ELM 
financial liabilities in Ukraine. 

1. 

2. 

1. 

Article 13 

Assessment of adequacy of the provisioning rate and a review procedure 

Every six months starting on 30 June 2023, and whenever the Commission concludes 
that other reasons or events indicate the need to do so, the Commission shall assess 
whether  there  are  new  developments  which  could  impact  the  adequacy  of  the 
provisioning  rate,  including  the  rate  of  the  paid-in  provisioning,  referred  to  in 
Articles  11  and  12  in  a  lasting  and  meaningful  manner.  The  Commission  shall  in 
particular  identify  the  presence  of  a  sustained  significant  change  in  the  credit  risk 
profile of these exposures using data of a period of at least two years.  

The  Commission  shall  be  empowered  to  amend  Articles  11  and  12  to  adjust  the 
provisioning  rate  by  means  of  a  delegated  act  in  accordance  with  Article  16,  in 
particular to reflect the developments referred to in paragraph 1. 

Article 14 

Provisioning held in the Common Provisioning Fund 

Instead  of  the  general  rule  in  Article  31(6)  of  Regulation  (EU)  2021/947,  the 
financial  liability  from  the  covered  MFAs  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 covered MFA shall be used 
solely  for  financial  liabilities  under  this  Decision  and  under  Decision  (EU) 
2022/1201. 

Instead  of  the  general  rule  in  Article  31(8)  of  Regulation  (EU)  2021/947,  the 
financial  liability  from  the  covered  ELM  financial  liabilities  in  Ukraine  shall  be 
covered  separately  from  other  financial  liabilities  under  the  Guarantee  Fund  for 
External Action and the provisioning set aside in the Common Provisioning Fund in 
respect  of  the  covered  ELM  financial  liabilities  in  Ukraine  shall  be  used  solely  for 
financial liabilities under this Decision and under Decision (EU) 2022/1201. 

EN 

26 

  EN 

 
2. 

3. 

1. 

2. 

1. 

2. 

3. 

4. 

5. 

6. 

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  Fund  in  respect  to  the  covered  MFAs  and  covered  ELM  financial 
liabilities in Ukraine. 

By way of derogation from Article 213(4)(a) of the Financial Regulation, any surplus 
of  provisioning  referred  to  in  Article  12  shall  constitute  external  assigned  revenue 
within  the  meaning  of  Article  21(5)  of  the  Financial  Regulation  to  the  external 
assistance programme under which Ukraine is eligible.  

Chapter III 
Common provisions  

Article 15 

Committee procedure 

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

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

Article 16 

Exercise of the delegation  

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in this Article.  

The power to adopt delegated acts referred to in Article 13(2) shall be conferred on 
the Commission for an indeterminate period of time from the date of entry into force 
of this Decision. 

The delegation of power referred to in Article 13(2) may be revoked at any time by 
the European Parliament or by the Council. A decision to revoke shall put an end to 
the  delegation  of  the  power  specified  in  that  decision.  It  shall  take  effect  the  day 
following  the  publication  of  the  decision  in  the  Official  Journal  of  the  European 
Union  or  at  a  later  date  specified  therein.  It  shall  not  affect  the  validity  of  any 
delegated acts already in force. 

Before adopting a delegated act, the Commission shall consult experts designated by 
each  Member  State 
the 
in  accordance  with 
Interinstitutional Agreement on Better Law-Making of 13 April 2016. 

the  principles 

laid  down 

in 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

A  delegated  act  adopted  pursuant  to  Article  13(2)  shall  enter  into  force  only  if  no 
objection  has  been  expressed  either  by  the  European  Parliament  or  by  the  Council 
within a period of two months of notification of that act to the European Parliament 
and the Council or if, before the expiry of that period, the European Parliament and 
the  Council  have  both  informed  the  Commission  that  they  will  not  object.  That 

EN 

27 

  EN 

 
period shall be extended by two months at the initiative of the European Parliament 
or of the Council. 

Article 17 

Annual Report 

1. 

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  exceptional  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 
Memorandum  of  Understanding,  Ukraine’s  ongoing  macro-financial  situation 
and  the  Commission’s  decisions  to  release  the  instalments  of  the  Union’s 
exceptional macro-financial assistance. 

2. 

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  exceptional  macro-
financial  assistance  and  the  extent  to  which  it  has  contributed  to  the  aims  of  the 
assistance. 

Chapter IV 
Amendment to Decision (EU) 2022/1201 and final provision 

Article 18 

Decision (EU) 2022/1201 is amended as follows:  

1. 

Second sentence of paragraph 2 of Article 1 is replaced by the following: 

ʻThe loans under paragraph 1 and under Decision [COM(2022)XXX-present proposal] shall 
together have a maximum average maturity of 25 years.ʼ 

2. 

Article 7 is deleted. 

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

Article 19 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President

EN 

28 

  EN 

 
  
  
LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

Proposal  for  a  Decision  of  the  European  Parliament  and  of  the  Council  providing 
macro-financial assistance to Ukraine. 

1.2. 

Policy area(s) concerned in the ABM/ABB structure26 

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 action27  

 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. 

26 
27 

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

EN 

29 

  EN 

 
                                                 
 

 

 

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,  as  a  continuation  of  the 
emergency assistance already provided.  

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

1.4.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

The  authorities  of  Ukraine  will  be  required  to  report  on  a  set  of  economic  indicators  to  the 
Commission  services  on  a  regular  basis  and  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. The Commission will perform a second operational assessment 
during the implementation of the operation.  

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 several instalments.  The 
release of the instalments would occur swiftly after the approval of this proposal and the entry 
into force of the corresponding MoU, and become available thereafter.  

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 
to  monitor  relevant 
international  financial 
developments and the application of the requirements and conditions as agreed in the MoU. 

the  national  authorities 

institutions  and 

EN 

30 

  EN 

 
 
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 5 billion to Ukraine is part of the  
EU’s objective to provide up to 9 billion in short term liquidity support. The proposal follows 
and amends the Decision (EU) 2022/1201 on providing macro-financial assistance to Ukraine 
in the amount of EUR 1 billion in loans, which was fully disbursed in early August 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. 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

EN 

31 

  EN 

 
In principle, 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 put in place a coverage of 70% to these additional 
exposures  related  to  the  situation  in  Ukraine.  The  EU  budget  will  provide  a  first-loss 
protection for 9 % of the full package of EUR 6 billion in loans. This would be reinforced by 
the Member State guarantees for a further 61% of the value of the loans.    

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 during the period of the MFF 2021-2027. 

In  addition  to  the  provision  of  direct  support,  the  European  Commission  has  agreed  in  July 
2022  to  the  repurposing  of  EUR  1.59  billion  in  European  Investment  Bank  (EIB)  External 
Lending Mandate (ELM) loans to Ukraine supported by guarantees from the EU budget. An 
amount of 1.05 billion is to be disbursed by the EIB during the third quarter of 2022. Another 
EUR 536 million of loans is planned to be disbursed by the EIB in 2022-23 in order to help 
finance  the  resumption  of  selected  investment  projects.  However,  as  these  are  loans  to  the 
Ukrainian  sovereign  (or  guaranteed  by  it),  they  embody  the  same  level  of  risk  as  the 
exceptional MFA loans. Under the ELM Guarantee Agreements, the EIB has the right to call 
on the EU budget for up to the full amount of losses that it incurs on these loans.  It should 
therefore be  clarified that  the same precautionary approach should apply  to  these  exposures 
and that relevant additional provisions should be put into a specific common compartment of 
the  Common  Provisioning  Fund  (CPF)  dedicated  to  Ukraine.  This  proposal  therefore 
envisages  extending  the  70%  provisioning  rate  to  these  EUR  1.59  billion  of  additional 
exposure stemming from EIB repurposed loans.  

Possible synergies with other appropriate instruments 

The  EU  is  among  the  major  donors  to  Ukraine,  supporting  its  economic,  structural  and 
institutional reforms as well as civil society. The provision of further support to Ukraine in the 
form of loans, 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.28 

28 

EN 

presented 

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

Communication 

18  May 

the 

by 

in 

the 

Commission, 

32 

  EN 

 
                                                 
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 
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 

33 

  EN 

 
 
 
 
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 2021 to 2027 for commitment appropriations and from 

2022 to 2027 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) planned 

 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. 

EN 

34 

  EN 

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

the 

implementation, 

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 

the  Commission  will  check  periodically 

EN 

35 

  EN 

(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. 

EN 

36 

  EN 

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.29 

Diff. 

Diff. 

Contribution  

from 
EFTA 
countries
30 

from 
candidate 
countries31 

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 

29 
30 
31 

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 

37 

  EN 

 
 
                                                 
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 MFA I32 

Year 

2021 

Year 

2022 

Year 

2023 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 

Budget line33  
14 02 01 11 ” Eastern neighbourhood” 34 

Commitments 

(a) 

Payments 

(b) 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

20.0 

□ Operational appropriations MFA II 

Budget line  
14 02 01 11 “Eastern Neighbourhood” 35 

Commitments 

(a) 

150.0 

150.0 

150.0 

150.0 

150.0 

Payments 

(b) 

150.0 

150.0 

150.0 

150.0 

150.0 

100.0 

100.0 

750.0 

750.0 

32 
33 
34 
35 

Decision (EU) 2022/1201 
According to the official budget nomenclature. 
To be reinforced from the NDICI Emerging challenges and priorities cushion, budget line 14 02 04. 
To be reinforced from the NDICI Emerging challenges and priorities cushion, budget line 14 02 04. 

EN 

38 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
□ Provisioning for EUR 1.586 bn of disbursements of EIB loans under the Extended Lending Mandate 

Budget line  

Commitments 

(a) 

14  02  01  70  .  05  “NDICI  -  Provisioning  of  the 
Common Provisioning Fund” (9% provisioning) 

Payments 

(b) 

Budget line 

Commitments 

(a) 

14  02  01  70  .  05  “NDICI  –  Provisioning  of  the 
(61% 
Common 
provisioning) 

Provisioning 

Fund” 

36 

TOTAL appropriations for DG NEAR 

Payments 

(b) 

Commitments 

Payments 

Total 
(a) 

Total 
(b) 

47.58 

47.58 

47.58 

47.58 

47.58 

47.58 

322.48 

322.48 

322.48 

322.48 

322.48 

322.48 

170.0 

170.0 

540.06 

540.06 

540.06 

170.0 

170.0 

540.06 

540.06 

540.06 

DG: ECFIN 

Year 

2021 

Year 

2022 

Year 

2023 

Year 

2024 

Year 

2025 

Year 

2026 

Year 

2027 

TOTAL 

□  MFA I8 

Budget line 

14 02 01 70 . 06 “NDICI – Provisioning of the 
Common Provisioning Fund” 37 

Commitments 

(c) 

27.3 

62.7 

142.74 

142.74 

967.46 

967.46 

1 960.2 

1 960.2 

90.0 

36 
37 

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 

39 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Payments 

(d) 

 81.2 

 8.8 

□ MFA II 

Budget line  

14  02  01  70  .  06  “NDICI  -  Provisioning  of  the 
Common Provisioning Fund” 38 

Commitments 

(c) 

62.4 

162.6 

32.5 

143.4  49.1 

Payments 

(d) 

91.2  300.0 

58.8 

□ Appropriations of an administrative nature financed from the envelope 
of specific programmes39  

Budget line 

Commitments  

14 20 03 . 01 MFA Grants 

Payments 

TOTAL appropriations for DG ECFIN 

Commitments 

Payments 

(c) 

(d) 

Total 
(c) 

Total 
(d) 

0.15 

0.15 

0.15 

0.15 

27.3 

125.2 

162.6 

32.5 

143.55 

49.1 

0.15 

 81.2 

 100.15 

 300.0 

58.8 

TOTAL appropriations under 
HEADING 6 of the multiannual financial 
framework 

Commitments 

= a+c 

125.2 

27.3 

332.6 

202.5 

683.6 

589.19 

540.06 

Payments 

= b+d 

0.15 

170.0 

251.2 

640.22 

840.06 

598.87 

90.0 

450.0 

450.0 

0.3 

0.3 

540.3 

540.3 

2 500.5 

2 500.5 

38 
39 

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. 
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 

40 

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  commitments  =  Total 
payments) 

0.848 

0.484 

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) 

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

Commitments 

27.3 

126.098 

333.084 

202.924  683.672 

589.262 

540.132 

2502.472 

Payments 

0.998 

170.484 

251.624 

640.292 

840.132 

598.942 

2502.472 

EN 

41 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.2.  Estimated output funded with operational appropriations  

Commitment appropriations in EUR million (to three decimal places) 

Year 2021 

Year 2022 

Year 2023 

Year 2024 

Year 2025 

Year 2026 

Year 2027 

TOTAL 

OUTPUTS 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost 

o
N

Cost  N

o

Cost 

Tot
al 
No 

Total 
cost 

170.0 

170.0 

170.0 

170.0 

170.0 

850 

27.3 

125.2 

162.6 

32.5 

513.46 

419.16 

370.06 

1 650.2 

1 

0.15 

1 

0.15 

Indicate 
objectives and 
outputs  

Type40 

 

SPECIFIC OBJECTIVE No 141… 

- Output 

- Output 

- Output 

Grant 
disbursement
s 

Provisioning 
of the 
External 
Action 
Operational 
Guarantee 
Assessment 

40 
41 

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 

42 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
- Output 

Ex-post 
evaluation 

1 

0.15 

1 

0.15 

TOTAL 

27.3 

1 

125.2 

332.6 

1 

202.65 

683.46 

589.16 

540.06 

2 500.5 

EN 

43 

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 742  

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. 

42 

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 

44 

  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  44 

- 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)43 

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 

43 

44 

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 

45 

  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 

- 

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 

The proposal  includes contributions  by Member States in  the form of  guarantees have been 
identified  as  an  appropriate  tool  to  provide  the  protection  on  top  of  the  EU  budget 
provisioning  at  9%.  The  contributions  under  these  guarantees  should  be  included  into  the 
amount  of  authorised  financial  liability  by derogation  to  the  first subparagraph  of  Article 
211(1) of the Financial Regulation. The amounts of guarantee calls should be used to satisfy 
the Union’s  financial obligations arising from the borrowings and to replenish the Common 
Provisioning Fund. 

3.3. 

 

Estimated impact on revenue  

The proposal/initiative has no financial impact 

EN 

46 

  EN