Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing an Instrument for providing support to Ukraine for 2023 (macro-financial assistance +)
Date: 2022-11-09
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

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   EUROPEAN COMMISSION  Brussels, 9.11.2022  COM(2022) 597 final 2022/0371 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing an Instrument for providing support to Ukraine for 2023 (macro-financial assistance +)  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Russia’s recent escalation of its brutal war of aggression against Ukraine confirms its resolve 
to  violate  the  fundamental  rights  of  Ukraine  to  independence,  sovereignty  and  territorial 
integrity within its internationally recognised borders and destroy its viability as a State. The 
bravery,  courage  and  determination  shown  by  the  Ukrainian  people  to  defend  their  country 
deserve profound respect and gratitude. 

In  a  Team  Europe  approach,  the  EU,  its  Member  States  and  European  financial  institutions 
have  since  the  beginning  of  Russia’s  war  of  aggression  mobilised  EUR  19.7  billion  for 
Ukraine’s  economic,  social  and  financial  resilience.  This  combines  the  support  from  the 
Union  budget  (EUR  12.4  billion),  including  macro-financial  assistance,  support  from  the 
European  Investment  Bank  and  the  European  Bank  for  Reconstruction  and  Development, 
fully or partially guaranteed by the EU budget, as well as further financial support by Member 
States (EUR 7.3 billion). 

The  EU  budget,  in  particular  via  the  European  Neighbourhood  Instrument  and  the 
Neighbourhood, Development and International  Cooperation Instrument, has been providing 
comprehensive reform and investment support to Ukraine since 2014. Since the beginning of 
the  Russian  war  of  aggression,  this  support  has  been  reoriented  especially  to  emergency 
assistance  and,  increasingly,  rehabilitation  of  damaged/destroyed  national  and  municipal 
infrastructure  and  housing.  It  is  critical  to  continue  this  support  in  a  complementary  way 
through the MFA+ instrument, including by reforms linked to Ukraine’s European path. 

In addition, the Council decided on assistance measures to support the Ukrainian armed forces 
under  the  European  Peace  Facility,  amounting  to  EUR  3.1  billion,  and a  military  assistance 
mission in support of Ukraine with EUR 0.1 billion for the common costs aiming at training 
15.000  soldiers  as  a  first  start. The  EU  and  its  Member  States  have  also  delivered  an 
unprecedented  in-kind  emergency  response  via  the  EU  Civil  Protection  Mechanism, 
constituting  the  largest  emergency  operation  since  the  creation  of  the  Mechanism,  and 
channelled millions of emergency items to Ukraine and the region. 

The  damage  from  Russia’s  war  of  aggression  on  the  Ukrainian  economy,  citizens  and 
businesses is tremendous. In the short run, the International Monetary Fund predicts that the 
Ukrainian economy could contract by as much as 35% in real terms by the end of this year. 
Inflation has been accelerating and is set to reach 30% by the end of 2022, due to scarcities of 
goods,  logistical  challenges  to  supply  and  the  financing  of  government  needs  by  monetary 
creation.  

Due to Russia’s ongoing war, the short-term funding needs of Ukraine for 2023 are expected 
to  be significant.  According to recent  estimates by the Ukrainian authorities, in  cooperation 
with  the  International  Monetary  Fund,  there  will  be  a  continuous  funding  gap  of  between 
EUR  3  and  4  billion  per  month  in  2023.  Ukraine  will  continue  to  experience  high  funding 
needs in the short-term, to maintain essential state functions, ensure macroeconomic stability 
and rehabilitate critical infrastructure destroyed by Russia’s war. That is why it is critical that 
new support is mobilised as quickly as possible.  

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The coming months will be decisive to agree on additional support. This short-term support 
will  require  a  coordinated  international  effort  and  close  cooperation  among  international 
partners.  The  EU  is  steadfast  in  its  support  to  Ukraine  whose  future  lies  within  the  EU. 
Continuing the support to Ukraine under an organised collective approach is a strong priority 
for the Union. 

The Union’s macro-financial assistance to Ukraine in 2022 has been generous and effective. 
The Union has committed EUR 7.2 billion of highly concessional loans, including a subsidy 
on  interest  rate  payments,  under  its  emergency  and  exceptional  macro-financial  assistance 
packages,  out  of  which  EUR  4.2  billion  were  disbursed  already  by  mid-October,  with  the 
remaining EUR 3 billion set to reach Ukraine by the end of the year. Yet, so far assistance has 
been provided on an ad-hoc basis, covering a few months at a time. It has required significant 
provisioning  from  the  EU  budget  and  national  guarantees.  Therefore,  a  more  structural  and 
efficient  approach  to  the  Union’s  support  to  Ukraine  in  2023  should  be  considered.  This 
proposal sets an orderly and sustainable framework for the channelling of financial assistance 
to Ukraine, while offering sufficient flexibility to adjust  the support to the evolving funding 
needs of the country and preparing the ground for a future ‘Rebuild Ukraine’ Facility, in line 
with  the  Communication  of  18  May  2022  on  “Ukraine  Relief  and  Reconstruction”1  and  the 
principles agreed in the Lugano’s Ukraine Reform Conference of July 2022.  

The broad parameters  of the Union’s relief and  rehabilitation support should be decided for 
the whole of 2023 on basis of a stable framework. A unified and efficient system to secure the 
best borrowing conditions and extend market access for loan support has major advantages in 
a context of rising costs and interest rates.  

To this end, the Commission proposes to create an instrument to provide support to Ukraine 
(macro-financial  assistance  +)  for  2023.  The  instrument  will  provide  short-term  financial 
relief in the form of highly concessional loans in a predictable, continuous, orderly and timely 
manner, financing immediate needs, rehabilitation of critical infrastructure and initial support 
towards  sustainable  post-war  reconstruction,  with  a  view  to  supporting  Ukraine  on  its  path 
towards European integration. The EU will subsidise the interest rate costs of Ukraine, which 
will  be  financed  by  contributions  from  Member  States  in  the  form  of  external  assigned 
revenue until the end of 2027. To ensure coverage of interest costs during the lifetime of the 
loans,  contributions  from  Member  States  beyond  2027  should  be  renewed  and  continue  as 
external assigned revenue unless covered through other means in future multiannual financial 
frameworks.  Furthermore,  amounts  stemming  from  additional  voluntary  contributions  from 
Member States and possible contributions from third countries and parties may provide non-
repayable support. 

Upcoming  funding  needs  for  Ukraine  require  mobilisation  and  disbursement  in  a  cost-
effective and agile manner. It is of paramount importance that this funding be organised under 
a single funding method alongside other EU funding in order to allow multiple policy needs to 
be  met  concurrently.  For  that  reason,  it  is  necessary  to  amend  Regulation  (EU,  Euratom) 
2018/1046,  to  establish  the  diversified  funding  strategy,  currently  implemented  for 
borrowings  under  Decision  (EU,  Euratom)  2020/20532  as  the  baseline  method  for  the 
implementation of borrowing operations. 

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COM/2022/233 final 
Council Decision (EU, Euratom) 2020/2053 of 14 December 2020 on  the system of own resources of 
the European Union and repealing Decision 2014/335/EU, Euratom, OJ L 424, 15.12.2020, p. 1. 

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To  ensure  a  sound  financial  underpinning,  loans  to  Ukraine  should  be  backed  up  by  a 
guarantee  from  the  EU  budget  headroom,  i.e.  the  budgetary  space  above  the  ceiling  for 
payments of the multiannual financial framework (MFF) up to the limit of the own resources 
ceiling. It would provide a high degree of protection and reassurance to investors,  avoid the 
need for provisioning of loans or establishment of national guarantees, without changes to the 
size  or  ceilings  of  the  MFF.  This  necessitates  a  limited  amendment  of  Regulation  (EU, 
Euratom) 2020/20933 that will allow contingent liabilities stemming from financial assistance 
to Ukraine available for 2023 and 2024 to be treated in the same way as financial assistance 
for Member States. 

Support  under  the  instrument  will  require  Ukraine  to  further  enhance  rule  of  law,  good 
governance, anti-fraud and anti-corruption measures. Therefore, while taking into account the 
evolution  on  the  ground,  financial  support  should  be  framed  by  policy  conditions, 
increasingly geared towards strengthening Ukraine’s institutions and preparing the ground for 
a successful reconstruction effort as well as supporting Ukraine’s efforts on its European path. 

The future of Ukraine and its citizens lies  indeed within the EU. The European Council has 
granted candidate status to Ukraine in June 2022. The immediate effort to sustain Ukraine’s 
financial  resilience  as  well  as  the  long-term  reconstruction  will  require  Union’s  expertise, 
working with international partners, as well as transparency and monitoring.  

• 

Consistency with existing policy provisions in the policy area 

The support under this instrument will be consistent and complementary to activities financed 
under  Regulation  (EU)  2021/9474  and  Regulation  (EC)  No  1257/965  in  line  with  the 
respective objectives, intervention logic and rules of these instruments. 

• 

Consistency with other Union policies 

The  candidate  status  granted  by  the  European  Council  on  23  June  2022  anchors  Ukraine 
firmly  on  its  European  path.  This  is  why  the  whole  EU  response  in  support  of  Ukraine’s 
resilience and recovery – including through this instrument – will also contribute to the early 
phase of Ukraine’s pre-accession process.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article 212 TFEU is an appropriate legal basis for financial assistance programme granted by 
the  Union  for  third  countries,  which  are  not  development  countries.  The  continued 
unprovoked  and  unjustified  military  aggression  by  Russia  requires  granting  of  additional 
financial assistance to Ukraine in line with the objectives and modalities described under this 
proposal. 

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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. 
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. 
Council  Regulation  (EC)  No  1257/96  of  20  June  1996  concerning  humanitarian  aid  (OJ  L  163, 
2.7.1996, p. 1). 

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• 

Subsidiarity (for non-exclusive competence)  

The  subsidiarity  principle  is  respected  as  the  need  for  a  common  response  in  providing 
support to  Ukraine on adequate scale cannot  be sufficiently  achieved by  the Member States 
alone  and  can  be  better  achieved  by  the  EU.  The  main  reasons  are  the  fiscal  capacity  and 
budgetary constraints faced at the national level and the need for strong donor coordination in 
order to maximise the scale and effectiveness of the support, while limiting the burden on the 
administrative  capacity  of  Ukrainian  authorities,  which  is  very  stretched  in  the  current 
circumstances.  

• 

Proportionality 

The proposed financial support  to  Ukraine is  considered adequate in  size, based on  the best 
estimates  of  Ukraine’s  funding  needs,  submitted  by  the  national  authorities  and  assessed  in 
cooperation  with  the  international  community,  including  the  International  Monetary  Fund. 
Such  support  does  not  go  beyond  what  is  necessary  for  the  sought  purpose  to  provide 
structured and predictable support to Ukraine in 2023 and its related financing. 

• 

Choice of the instrument 

A  Regulation  is  the  appropriate  instrument  as  it  provides  directly  applicable  rules  for  the 
support.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The  proposal  follows  a  series  of  macro-financial  assistance  operations  provided  to  Ukraine 
since 2015. Past ex-post evaluations of previous MFA operations to Ukraine have shown that 
in general they were highly relevant in terms of their objectives, financial envelope and policy 
conditions. In particular, MFA operations 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  conditionality  attached  to  the  MFA  operations  was  found 
complementary to the related IMF programmes. It created a politically reinforcing effect that 
contributed  to  the  mobilisation  of  the  Ukrainian  authorities  around  essential  reforms, 
especially  in  structural  policy  areas  that  are  less  covered  by  other  international  donor 
programmes. 

The  one-by-one  approach  to  financial  assistance  to  Ukraine  in  2022  has  demonstrated 
significant  drawbacks  in  the  context  of  the  war,  however,  in  particular  on  agreeing  on  the 
financing  side.  It  has  required  significant  provisioning  from  the  EU  budget  and/or  national 
guarantees. To avoid having to repeatedly seize the EU and national legislators on financial 
support issues, the broad parameters of the Union’s relief and rehabilitation support should be 
decided for the whole of 2023 on the basis of a stable framework.  

• 

Stakeholder consultations 

The proposal delivers on the calls for stable and predictable Union support to Ukraine from 
the  international  community  and  the  country  itself.  In  the  preparation  of  this  proposal,  the 
Commission  services  have  consulted  with  international  financial  institutions  and  other 
bilateral  (including  Member  States)  and  multilateral  donors,  with  significant  expertise, 

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including  as  regards  the  Ukrainian  economy.  The  Commission  has  also  been  in  regular 
contact with the Ukrainian authorities.  

• 

Collection and use of expertise 

The proposal builds on thirty years long experience with macro-financial assistance as well as 
on experience with Union’s external action support.  

The  Commission  based  this  proposal  on  a  careful  analysis,  also  building  on  inputs  from 
international  financial  institutions  and  other  competent  international  institutions,  of  the 
financial needs and broader macro-financial situation of Ukraine. This includes discussions on 
a regular basis of the latest projections of Ukraine’s funding needs within international fora, 
e.g.  the  G7,  International  Expert  Conference  on  the  Recovery,  Reconstruction  and 
Modernisation  of  Ukraine,  as  well  as  continuous  direct  contacts  with  the  Ukrainian 
authorities. 

• 

Impact assessment 

The  Union’s  macro-financial  assistance  is  an  exceptional  emergency  instrument  aimed  at 
addressing  severe  balance-of-payments  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 MFA+ Instrument will help alleviate the 
short-term funding needs of Ukraine in 2023, given the current extraordinary circumstances. 
The  reporting  requirements  and  policy  conditions  linked  to  it  aim  to  ensure  the  efficiency, 
transparency, and accountability of the support. This MFA+ Instrument should build upon the 
achievements of the seven MFA programmes since 2015, including the latest COVID-19, the 
early 2022 emergency and the 2022 exceptional MFA operations. 

• 

Regulatory fitness and simplification 

The proposal is not linked to regulatory fitness and simplification. 

• 

Fundamental rights 

A pre-condition for granting support under the instrument is that Ukraine continues to respect 
effective  democratic  mechanisms  and  its  institutions,  including  a  multi-party  parliamentary 
system, the rule of law, and to guarantee respect for human rights. 

The  reform-commitment  and  strong  political  will  by  the  Ukrainian  authorities  is  a  positive 
sign, in particular as evidenced by the European Council granting candidate status to Ukraine 
in June 2022 and by the renewed successful completion of the structural policy conditionality 
attached  to  the  recent  MFA  operations  to  Ukraine.  Since  the  Russian  aggression,  the 
Ukrainian  authorities  have  shown  an  impressive  degree  of  resilience  and  have  remained 
committed  to  pursue  these  reforms  in  a  transparent  manner  and  working  towards  EU 
standards and in line with the country’s path towards EU integration. 

To that end, the political pre-condition for an MFA operation is considered to be satisfied at 
present.  At  the  same  time,  the  continuous  adherence  to  this  political  pre-condition  will  be 
further  ensured  by  policy  conditionalities  as  established  in  the  future  Memorandum  of 
Understanding for this instrument. 

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4. 

BUDGETARY IMPLICATIONS 

An  overall  envelope  of  up  to  EUR  18  billion  in  loans  will  be  provided  for  a  period  of  12 
months, corresponding to EUR 1.5 billion on average per month. This amount comes on top 
of the assistance provided via existing instruments. 

Additional amounts stemming from specific voluntary contributions from Member States (as 
external assigned revenue) would be used for the following purposes:  

 

 

 

Support  to  loans’  interest  costs  –  no  target  volume  can  be  set  in  advance  as  these 
costs will depend on the actual interest on the loans 

Non-repayable support for activities covered by the Memorandum of Understanding 
of the Instrument or  

To be channelled to the Neighbourhood, Development and International Cooperation 
Instrument  –  Global  Europe  (NDICI)  and/or  Humanitarian  Aid  for  activities 
benefitting Ukraine. 

Moreover, third countries and parties may make available extra resources to those described 
above,  as  external  assigned  revenue  to  contribute  to  the  Memorandum  of  Understanding  of 
the  Instrument  or  to  be  channelled  to  NDICI  and/or  Humanitarian  Aid  for  activities 
benefitting Ukraine. 

The Commission intends to grant the loans under the Instrument with long maturities (with a 
maximum duration of 35 years) and with no repayment of principal before 2033. This will be 
coupled with the above mentioned interest costs to be covered. 

Disbursements can be organised flexibly and swiftly in response to the needs of the Ukrainian 
authorities in the course of the year 2023. They could be envisaged in general, on a quarterly 
basis so as to minimise the administrative burden on the Ukrainian authorities. A review mid-
way  through  the  year  will  take  stock  of  the  evolution  of  Russia’s  war  of  aggression  and  its 
implications on the funding needs as well as of the continued relevance and feasibility of the 
policy conditionality.  

Further  details  on  the  budgetary  implications  and  the  human  and  administrative  resources 
required are provided in the Legislative Financial Statement attached to this proposal. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The  European  Union  should  make  this  MFA+  instrument  available  to  Ukraine  for  a  total 
amount  of  up  to  EUR  18  billion  in  the  form  of  highly  concessional  loans  in  a  predictable, 
continuous, orderly and timely manner, contributing to covering its short-term funding needs, 
financing  of  rehabilitation  of  critical  infrastructure  and  initial  support  towards  post-war 
reconstruction, with  a view to  supporting Ukraine on its path towards European integration. 
The support will contribute to covering the residual external funding gap of Ukraine in 2023 
and  is  planned  to  be  disbursed  in  several  instalments.  The  disbursements  would  further  be 
conditional on the implementation of the reporting requirements and policy reforms as agreed 
in the MoU and referred to in this Regulation, including the report to be provided by Ukraine 
ahead  of  the  disbursement  of  each  instalment.  The  Commission  will  work  closely  with  the 
national authorities to monitor relevant developments and the application of the requirements 
and  policy  conditions,  as  agreed  in  the  MoU.  The  support  will  be  managed  by  the 

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Commission. Specific provisions on the prevention of fraud and other irregularities, consistent 
with the Financial Regulation, are applicable. 

Finally,  the  Commission  will  submit  to  the  European  Parliament  and  to  the  Council  an 
assessment  of  the  implementation  of  the  Union’s  support  to  Ukraine  under  this  instrument, 
including an evaluation. 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  support  under  the 
Instrument and the extent to which it has contributed to the aims of the support. 

• 

Detailed explanation of the specific provisions of the proposal 

Chapter I of the Regulation concerns its general provisions. 

Article 1 provides the subject of the Regulation, which is the establishment of an Instrument 
for providing the Union’s support for Ukraine. 

Article 2 defines the general objective of the Instrument and lists its main specific objectives. 

Article  3  describes  the  areas  under  which  support  may  be  provided  in  order  to  achieve  the 
objectives of the Instrument. 

Article  4  gives  the  amounts  of  support  in  terms  of  loans.  It  also  provides  for  additional 
amounts for covering an interest rate subsidy and possible non-repayable support. Finally, the 
article sets the period of availability for the support. 

Article  5  describes  how  Member  States  and  interested  third  countries  and  parties  may 
contribute to the Instrument. 

Section 2 elaborates on the conditions of the support under the Instrument. 

Article 6 sets the general precondition for granting the support under the Instrument. 

Article  7  stipulates  that  the  Commission  will  conclude  with  Ukraine  a  Memorandum  of 
Understanding and provides information on its content, timing, and review. 

Article 8 refers to the reporting requirements under the Memorandum of Understanding. 

Section  3  gives  provisions  on  how  the  support  under  the  Instrument  is  released,  on  the 
assessment and information obligations. 

Article 9 provides how the support under the Instrument is released. 

Article 10 lays down the procedural steps for the release of the support. 

Article 11 gives rules on the reduction, suspension and cancellation of the support. 

Article 12 provides that the Commission shall assess the implementation of the support under 
the Instrument. 

Article 13 defines how the European Parliament and the Council will be informed about the 
developments regarding the Instrument. 

Chapter  II  of  the  Regulation  gives  specific  provisions  related  to  the  implementation  of  the 
Instrument: Article 14 in regard to the borrowing and lending operations and derogations from 
Regulation  (EU)  2021/947  with  regard  to  the  External  Action  Guarantee  coverage  and 
provisioning  requirements,  Article  15  –  on  the  interest  subsidy  and  Article  16  –  on  the 
financing agreement for the non-repayable support. 

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Chapter  III  of  the  Regulation  describes  the  common  and  final  provisions  regarding 
comitology (Article 17), annual reporting (Article 18), and entry into force (Article 19). 

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2022/0371 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing an Instrument for providing support to Ukraine for 2023 (macro-financial 
assistance +) 

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 procedure6, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

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An  Association  Agreement  between  the  Union  and  Ukraine7,  including  a  Deep  and 
Comprehensive Free Trade Area, entered into force on 1 September 2017. 

In  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 from the Union 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  threat,  right  before  the  Russian  invasion,  pursuant  to  Decision  (EU) 
2022/313 of the European Parliament and of the Council8, provided EUR 1.2 billion in 
loans  to  Ukraine,  disbursed  in  two  instalments,  each  of  EUR  600  million,  in  March 
and May 2022.  

The  Union’s  exceptional  macro-financial  assistance  of  up  to  EUR  1  billion,  made 
available pursuant to Decision (EU) 2022/1201 of the European Parliament and of the 
Council9,  provided  swift  and  urgent  support  to  the  Ukrainian  budget  and  was  fully 
disbursed in two tranches on 1 and 2 August 2022. That assistance constituted the first 
stage of the planned exceptional macro-financial assistance to Ukraine for up to EUR 
9  billion,  announced  by  the  Commission  in  its  Communication  of  18  May  2022 

Position of the European Parliament of ... 2022 (not yet published in the Official Journal) and decision 
of the Council of ...  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 February 2022 
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). 

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entitled ‘Ukraine Relief and Reconstruction’ and endorsed by the European Council of 
23-24 June 2022.  
Decision  (EU)  2022/162810  constituted  a  further  step  in  the  implementation  of  that 
envisaged Union’s exceptional macro-financial assistance. It established the basis for 
providing to Ukraine a further amount of up to EUR 5 billion in the form of loans on 
highly concessional terms, out of which EUR 2 billion were disbursed on 18 October, 
with the remaining EUR 3 billion should be disbursed by the end of 2022.  

Russia’s  unprovoked  and  unjustified  war  of  aggression  against  Ukraine  since  24 
February  2022  has  caused  Ukraine  a  loss  of  access  to  financial  markets  and  a 
significant  drop  in  public  revenues,  while  public  expenditure  to  address  the 
humanitarian  situation  and  to  maintain  the  continuity  of  State  services  has  increased 
markedly. In that very uncertain and volatile situation, the best estimates of Ukraine’s 
funding  needs  by  the  International  Monetary  Fund  (IMF)  in  the  summer  of  2022 
pointed to an extraordinary funding gap of around USD 39 billion in 2022, of which 
around half could be met thanks to the international assistance. The swift provision by 
the  Union  of  the  macro-financial  assistance  to  Ukraine  under  Decision  (EU) 
2022/1628  was,  given  the  extraordinary  circumstances,  considered  to  be  an 
appropriate  short-term  response  to  the  sizeable  risks  to  Ukraine’s  macro-financial 
stability.  The  further  amount  of  up  to  EUR  5  billion  of  Union’s  exceptional  macro-
financial assistance under Decision (EU) 2022/1628 was to 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. 

The  Union,  its  Member  States  and  European  financial  institutions  have  since  the 
beginning  of  Russia’s  war  of  aggression  mobilised  EUR  19.7  billion  for  Ukraine’s 
economic, social  and financial resilience. This  combines  the support from  the Union 
budget  (EUR  12.4  billion),  including  the  exceptional  macro-financial  assistance  and 
support  from 
the  European  Bank  for 
Reconstruction  and  Development,  fully  or  partially  guaranteed  by  the  EU  budget,  as 
well as further financial support by Member States (EUR 7.3 billion).  

the  European  Investment  Bank  and 

In  addition,  the  Council  decided  on  assistance  measures  to  support  the  Ukrainian 
armed forces under the European Peace Facility, amounting to EUR 3.1 billion, and a 
military  assistance  mission  in  support  of  Ukraine  with  EUR  0.1  billion  for  the 
common costs. The Union and its Member States have also delivered unprecedented in 
kind  emergency  response  via  the  EU  Civil  Protection  Mechanism,  constituting  the 
largest  emergency  operation  since  the  creation  of  the  Mechanism,  and  channels 
millions of emergency items to Ukraine and the region. 
The European Council granted candidate status to Ukraine in June 2022.11 Continuing 
strong  support  to  Ukraine  is  a  key  priority  for  the  Union.  It  requires  an  organised 
collective  approach  set  out  in  this  instrument,  as  the  damage  from  Russia’s  war  of 
aggression on the Ukrainian economy, citizens and businesses is tremendous.  

Decision  (EU)  2022/1628  of  the  European  Parliament  and  of  the  Council  of  20  September  2022 
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 (OJ L 245, 22.9.2022, p. 1). 
European Council conclusions, 23-24 June 2022.  

(5) 

(6) 

(7) 

(8) 

(9) 

10 

11 

EN 

10 

  EN 

                                                 
(10)  Russia’s war of aggression against Ukraine represents a strategic geopolitical threat to 
the  Union  as  a  whole  and  requires  Member  States  to  stand  strong  and  united.  It  is 
therefore  essential  that  Union  support  be  deployed  rapidly  and  be  able  to  adapt 
flexibly and gradually for immediate relief and short-term rehabilitation on the way to 
future reconstruction. 

(11) 

In this context, the Instrument  established under this Regulation aims at  contributing 
to  closing  the  funding  gap  of  Ukraine  in  2023,  notably  by  providing  highly 
concessional short-term financial relief to the state budget in a predictable, continuous, 
orderly  and timely  manner,  including to  finance  the rehabilitation and initial  support 
towards post-war reconstruction, where appropriate, with a view to supporting Ukraine 
on its path towards European integration. 

(12)  To  attain  the  general  objective,  the  assistance  should  be  provided  to  support  macro-
financial stability in Ukraine, and to ease Ukraine’s external financing constraints. The 
Commission should implement the support in accordance with the key principles and 
objectives of the measures taken within the different areas of external action and other 
relevant Union policies. 

(13)  The  provision  of  rehabilitation  support,  repair,  and  maintenance  of  critical  functions 
and  infrastructure  as  well  as  relief  for  people  in  need  and  for  most  affected  areas  in 
terms of material and social support, temporary housing, residential and infrastructural 
construction should also count among the main areas of support under the Instrument. 

(14)  The Instrument should also support strengthening the capacity of Ukrainian authorities 
to prepare for the future post-war reconstruction and for the early preparatory phase of 
the  pre-accession  process,  as  appropriate, 
including  strengthening  Ukraine’s 
institutions,  reforming  and  reinforcing  the  effectiveness  of  public  administration  as 
well as transparency, structural reforms and good governance at all levels. 

(15)  The  Instrument  will  support  the  Union’s  external  policy  towards  Ukraine.  The 
Commission and the European External Action Service should work closely together 
throughout the support operation in order to coordinate, and ensure the consistency of, 
the  Union’s  external  policy.  The  support  to  Ukraine  under  this  Regulation  continues 
contributing  significantly  to  satisfying  Ukraine’s  funding  needs  as  estimated  by  the 
IMF,  World  Bank  and  other  international  financial  institutions,  taking  into  account 
Ukraine’s capacity to  finance itself with  its own  resources. The determination of the 
amount  of  the  support  also  takes  into  account  the  expected  financial  contributions 
from  bilateral  and  multilateral  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. 

(16)  The  situation  of  Ukraine  requires  a  step-by-step  approach  whereby  an  instrument 
focusing  on  macro-financial  stability  as  well  as  immediate  relief  and  rehabilitation 
the  Neighbourhood, 
should  be  accompanied  by  continuous  support  under 
Development  and  International  Cooperation  Instrument  –  Global  Europe  and  the 
Humanitarian Aid Instrument.  

(17)  The  Regulation  should  lay  down  the  resources  available  for  the  Instrument  for  the 
period from 1 January 2023 to  31 December 2023 with  possible disbursements until 
31 March 2024. A maximum amount of EUR 18 billion should be made available in 
the  form  of  loans.  In  addition,  for  the  period  from  1  January  2023  to  31  December 
2027 the Regulation should provide for an interest rate subsidy. To ensure coverage of 
interest  costs  during  the  lifetime  of  the  loans,  contributions  from  Member  States 

EN 

11 

  EN 

beyond  2027  should  be  renewed  and  continue  as  external  assigned  revenue  unless 
covered through other means in future multiannual financial frameworks. Therefore it 
might be possible to extend the contributions from Member States beyond 2027. 

(18)  The Regulation should provide the possibility for the Member States to make available 
additional  resources,  as  external  assigned  revenue,  to  be  implemented  under  the 
Memorandum  of  Understanding  of  this  Instrument.  Such  a  possibility  for  additional 
contribution should also be made for third countries and interested parties as external 
assigned  revenues,  in  accordance  with  Article  21(2),  point  (d)  and  (e)  of  Regulation 
(EU, Euratom) 2018/1046 of the European Parliament and of the Council12. To foster 
synergies  and  complementarities,  it  is  appropriate  to  allow  that  such  additional 
contributions  from  Member States, from  third countries and other third parties  could 
also  be  made  available  to  the  programmes  established  under  Regulation  (EU) 
2021/947  of  the  European  Parliament  and  of  the  Council13  and  Council  Regulation 
(EC)  No  1257/9614  to  finance  measures  contributing  to  the  objectives  of  this 
Instrument. 

(19)  Voluntary  contributions  by  Member  States  should  be  irrevocable,  unconditional  and 
on  demand.  For  this  purpose,  the  Member  State  providing  the  support  should  enter 
into a contribution agreement within the meaning of Article 22(2) of Regulation (EU, 
Euratom) 2018/1046 with the Commission. The contribution agreement should cover 
the  contribution  to  the  interest  rate  subsidy  and,  should  the  Member  State  wish  to 
provide them, also additional amounts. 

(20)  The support under the Instrument should be made available under the precondition that 
Ukraine  continues  to  respect  effective  democratic  mechanisms  and  its  institutions, 
including a multi-party parliamentary system, the rule of law and to guarantee respect 
for human rights. 

(21)  The support under the Instrument should be linked to policy conditions to be set out in 
a  memorandum  of  understanding.  They  should  also  include  commitments  to 
strengthen 
the  business 
environment,  facilitate  critical  reconstruction  and  address  challenges  in  the  energy 
sector. 

the  country’s  economic  performance  and  resilience, 

(22)  The  policy  conditions  should  be  complemented  by  stringent  reporting  requirements, 
aiming  to  ensure  that  the  funds  are  used  in  an  efficient,  transparent  and  accountable 
manner.  

(23) 

In view of the current situation in Ukraine it is appropriate to provide for a mid-term 
review of the memorandum of understanding. 

12  

13 

14 

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on 
the  financial  rules  applicable  to  the  general  budget  of  the  Union,  amending  Regulations  (EU)  No 
1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) 
No  1316/2013,  (EU)  No  223/2014,  (EU)  No  283/2014,  and  Decision  No  541/2014/EU  and  repealing 
Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1). 
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. 
Council  Regulation  (EC)  No  1257/96  of  20  June  1996  concerning  humanitarian  aid  (OJ  L  163, 
2.7.1996, p. 1). 

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12 

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(24)  The  support  should  be  released  subject  to  the  respect  of  preconditions,  satisfactory 

implementation and progress towards the implementation of the policy conditions.  

(25) 

(26) 

It is appropriate to provide for the possibility to reassess the funding needs of Ukraine 
and to reduce, suspend or cancel the support if they decrease fundamentally during the 
period of the disbursement of the Union’s support under the Instrument compared to 
the initial projections. It is also appropriate to provide for the possibility to suspend or 
cancel the disbursements in case the requirements for the release of the support under 
the Instrument are not fulfilled.  

In  the  current  context  of  urgent  financial  needs  of  the  country,  it  is  appropriate  to 
organise the financial assistance to Ukraine under the single funding method provided 
under  Article  220a  of  Regulation  (EU,  Euratom)  2018/1046,  which  is  expected  to 
enhance the liquidity of Union’s bonds and the attractiveness and cost-effectiveness of 
Union’s issuance.  

(27)  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 provide to Ukraine loans 
on  highly  concessional  terms  with  a  maximum  duration  of  35  years  and  start  of  the 
repayment  of  the  principal  not  before  2033.  It  is  also  appropriate  to  derogate  from 
Article 220(5), point (e) of Regulation (EU, Euratom) 2018/1046 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  Regulation  (EU,  Euratom)  2018/1046.  It  should  be  financed  from 
additional  voluntary  contributions  by  the  Member  States  and  should  be  available 
gradually as the agreements with the Member States have entered into force.  

(28)  Ukraine might request the subsidy of the interest rate and the waiver of administrative 

costs by end-March of each year. 

(29)  The financial liability from loans under this Regulation should not be supported by the 
External  Action  Guarantee,  by  derogation  to  Article  31(3),  second  sentence  of 
Regulation  (EU)  2021/947.  The  amounts  necessary  to  cover  any  shortfall  under  the 
financial  assistance  to  Ukraine  available  for  2023  should  be  mobilised  in  line  with 
Article  2(3)  of  Council  Regulation  (EU,  Euratom)  2020/209315.  The  support  should 
constitute financial assistance within the meaning of Article 220(1) of Regulation (EU, 
Euratom)  2018/1046.  In  considering  the  financial  risks  and  the  budgetary  coverage, 
the  provisioning  should not  be  constituted  for  the  financial  assistance  in  the  form  of 
loans  under  this  Instrument  and,  by  derogation  to  Article  211(1)  of  the  Regulation 
(EU, Euratom) 2018/1046, no provisioning rate as a percentage of the amount referred 
to in Article 4(1) should be set.  

(30) 

It is appropriate that the Commission and Ukraine conclude a loan agreement for the 
loan  support,  within  the  framework  of  conditions  set  out  in  the  MoU.  In  order  to 
ensure that the Union’s financial interests linked to the support under the Instrument 
are protected efficiently, Ukraine should take appropriate measures on the prevention 
of  and  fight  against  fraud,  corruption  and  any  other  irregularities  linked  to  that 
assistance.  In  addition,  provision  should  be  made  in  the  loan  agreement  and  in  the 
financing agreement for the Commission to carry out checks, for the Court of Auditors 

15  

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). 

EN 

13 

  EN 

                                                 
to  carry  out  audits  and  for  the  European  Public  Prosecutor’s  Office  to  exercise  its 
competences,  in  accordance with  Articles 129 and 220 of Regulation  (EU, Euratom) 
2018/1046. 

(31)  Since the objective of this Regulation cannot be sufficiently achieved by the Member 
States  but  can  rather,  by  reason  of  its  scale  and  effects,  be  better  achieved  at  Union 
level, the Union may adopt measures, in accordance with the principle of subsidiarity 
as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In  accordance  with  the 
principle  of  proportionality,  as  set  out  in  that  Article,  this  Regulation  does  not  go 
beyond what is necessary in order to achieve that objective. 

(32) 

(33) 

In  order  to  ensure  uniform  conditions  for  the  implementation  of  this  Regulation, 
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 Council16. 

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

(34) 

In light of the current situation in Ukraine, this Regulation should enter into force as a 
matter of urgency on the day following that of its publication in the Official Journal of 
the European Union. 

HAVE ADOPTED THIS REGULATION: 

Chapter I 
Union’s support for Ukraine 

SECTION 1 
GENERAL PROVISIONS 

Article 1 
Subject matter 

This Regulation establishes an Instrument for providing the Union’s support for Ukraine (the 
‘Instrument’) in the form of loans, non-repayable support and an interest rate subsidy. 

It lays down the objectives of the Instrument, its financing, the forms of Union funding under 
it and the rules for providing such funding. 

16  

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

EN 

14 

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Article 2 
Objectives of the Instrument 

1. 

2. 

The general objective of the Instrument shall be to provide short term financial relief 
in  a predictable,  continuous,  orderly  and  timely  manner,  financing  of  rehabilitation 
and initial support towards post-war reconstruction, where appropriate, with a view 
to supporting Ukraine on its path towards European integration.  

To reach the general objective, the main specific objectives shall in particular be to 
support: 

(a)  macro-financial  stability,  and  to  ease  the  Country’s  external  and  internal 

financing constraints; 

(b) 

a  reform  agenda  gearing  towards  the  early  preparatory  phase  of  the  pre-
including  strengthening  Ukraine’s 
accession  process,  as  appropriate, 
institutions, 
the  effectiveness  of  public 
reinforcing 
administration as well as transparency, structural reforms and good governance 
at all levels; 

reforming  and 

(c) 

rehabilitation  of  critical  functions  and  infrastructure  and  relief  for  people  in 
need 

To achieve its objectives, the Instrument shall support notably the following: 

Article 3 
Areas of support  

(a) 

(b) 

the  financing  of  Ukraine’s  funding  needs,  with  a  view  to  maintaining  the 
macro-financial stability of the country; 

rehabilitation,  for  instance  in  restoring  critical  infrastructure,  such  as  energy 
infrastructure, water systems, transport networks, internal roads or bridges, or 
in  strategic  economic  sectors  and  social  infrastructure,  such  as  healthcare 
facilities, schools, and housing for relocated persons, including temporary and 
social housing; 

(c) 

sectoral  and  institutional  reforms,  including  anti-corruption  and  judicial 
reforms, respect of the rule of law, good governance, and modernisation of the 
national and local institutions; 

(d)  preparation of the reconstruction of Ukraine; 

(e) 

support for the alignment of the regulatory framework of Ukraine to that of the 
Union  and  the  country’s  integration  into  the  single  market,  as  well  as 
strengthening economic development and improving competitiveness;  

(f) 

the  strengthening  of  Ukraine’s  administrative  capacity  through  appropriate 
means, including the use of technical assistance.  

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1. 

2. 

3. 

4. 

1. 

2. 

3. 

4. 

Article 4 
Available support under the Instrument 

The  support  under  the  Instrument  in  the  form  of  loans,  shall  be  available  for  an 
amount  of  up  to  EUR  18  000  000  000  for  the  period  from  1  January  2023  to  31 
December 2023 with possible disbursement until 31 March 2024. 

Additional  support  under  the  Instrument  for  the  period  from  1  January  2023  to  31 
December  2027  shall  also  be  available,  subject  to  Article  5(1),  for  covering  the 
expenditure pursuant to Article 15. This additional support may be available beyond 
31 December 2027 subject to Article 5(1). 

Additional  amounts  available  in  accordance  with  Article  5(2)  and  5(4)  of  this 
Regulation may be implemented as non-repayable support where provided for in the 
Memorandum of Understanding to be concluded in accordance with Article 7 of this 
Regulation or in accordance with Regulation (EU) 2021/947 and Regulation (EC) No 
1257/96 to finance measures achieving the objectives referred to in Article 2(2)(b) to 
(c) to in accordance with the rules of those Regulations. 

The  amounts  referred  to  in  paragraph  3  may  cover  support  expenditure  for  the 
implementation of the Instrument and for the achievement of its objectives, including 
administrative  support  associated  with  the  preparation,  follow-up,  monitoring, 
control, audit and evaluation activities necessary for such implementation, as well as 
expenditure  at  headquarters  and  Union  delegations  for  the  administrative  and 
coordination support needed for the  Instrument,  and to  manage operations financed 
under  the  Instrument,  including  information  and  communication  actions,  and 
corporate information technology systems.    

Article 5 
Contributions by Member States and third parties 

Member States may contribute to the amounts referred to in Article 4(2). The relative 
share  of  the  contribution  of  the  Member  State  concerned  to  those  amounts  shall 
correspond  to  the  relative  share  of  that  Member  State  in  the  total  gross  national 
income (GNI) of the Union. For the contributions for year n, the GNI-based relative 
share shall be calculated as the share in the total GNI of the Union, as resulting from 
the respective column in the revenue part of the last adopted annual Union budget or 
amending annual Union budget for the year n-1. 
The  support  under  the  Instrument  under  this  paragraph  shall  become  available  in 
respect  of  any  amount  set  in  an  agreement  with  the  respective  Member  State  after 
that agreement enters into force. 

Member States may contribute to the Instrument with additional amounts as referred 
to in Article 4(3). 

The contributions referred to in paragraphs 1 and 2 shall constitute external assigned 
revenue in accordance with Article 21(2), point (a)(ii) of Regulation (EU, Euratom) 
2018/1046. 

Interested  third  countries  and  parties  may  also  contribute  to  non-repayable  support 
under the Instrument with additional amounts referred to in Article 4(3), in particular 
related  to  the  specific  objectives  referred  to  in  Article  2(2)(b)  to  (c).  These 
contributions  shall  constitute  external  assigned  revenue  in  accordance  with  Article 
21(2), point (d) and (e) of Regulation (EU, Euratom) 2018/1046. 

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SECTION 2 
CONDITIONS OF THE SUPPORT UNDER THE INSTRUMENT 

Article 6 
Precondition for the support under the Instrument 

A precondition  for granting the support under this  Instrument shall be that Ukraine 
continue to uphold and respect effective democratic mechanisms, including a multi-
party parliamentary system, the rule of law, and guarantee respect for human rights. 

The  Commission  and  the  European  External  Action  Service  shall  monitor  the 
fulfilment  of  the  precondition  set  out  in  paragraph  1  throughout  the  period  of  the 
support provided under the Instrument, in particular before disbursements are made, 
taking, as appropriate, duly into account the regular enlargement report. It shall also 
take  into  account  the  circumstances  in  Ukraine  and  the  consequences  of  the 
application there of martial law. 

Paragraphs 1 and 2 of this Article shall apply in  accordance with Council Decision 
2010/427/EU17. 

Article 7 
Memorandum of Understanding 

The  Commission  shall  conclude  with  Ukraine  a  Memorandum  of  Understanding 
which  shall  in  particular  establish  the  policy  conditions,  the  indicative  financial 
planning and the reporting requirements, as referred to in Article 8.  

The  policy  conditions  shall  be  linked,  as  appropriate,  in  the  context  of  the  overall 
situation  in  Ukraine,  to  the  objectives  and  their  implementation  referred  to 
respectively  in  Article  2  and  Article  3  and  to  the  precondition  set  out  in  Article  6. 
They shall include commitment to the principles of sound financial management with 
focus on anti-corruption, fight against organised crime, anti-fraud and avoidance of 
conflict  of  interests  and  the  establishment  of  a  transparent  and  accountable 
framework  for 
the  management  of  rehabilitation  and,  where  appropriate, 
reconstruction.  

The MoU may be reviewed by the Commission at mid-term. The Commission may 
amend the MoU following the review. 

The  MoU  shall  be  adopted  and  amended  in  accordance  with  the  examination 
procedure referred to in Article 17(2).  

1. 

2. 

3. 

1. 

2. 

3. 

17 

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). 

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17 

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1. 

2. 

1. 

2. 

1. 

2. 

Article 8 
Reporting requirements 

Reporting requirements for Ukraine shall be included in the MoU and shall ensure, in 
particular,  the  efficiency,  transparency  and  accountability  of  the  use  of  the  support 
provided under the Instrument. 

The  Commission  shall  verify,  at  regular  intervals,  the  implementation  of  the 
reporting requirements and the progress made towards fulfilling the policy conditions 
set out in the MoU. The Commission shall inform the European Parliament and the 
Council of the results of that verification. 

SECTION 3 
RELEASE OF THE SUPPORT UNDER THE INSTRUMENT, ASSESSMENT AND 
INFORMATION OBLIGATIONS 

Article 9 
Release of the support under the Instrument 

Subject  to  the  requirements  referred  to  in  Article  10,  the  support  under  the 
Instrument  shall  be  made  available  by  the  Commission  in  instalments.  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 support under the Instrument shall be managed by the Commission 
based  on  its  assessment  of  the  implementation  of  the  policy  conditions  included  in 
the MoU. 

Article 10 
Decision on release of the support under the Instrument 

Ukraine  shall  submit  a  request  for  funds  ahead  of  the  disbursement  of  each 
instalment accompanied by a report in accordance with the provisions of the MoU.  

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 6;  

the  satisfactory  implementation  of  the  reporting  requirements  agreed  in  the 
MoU; 

satisfactory  progress  towards  the  implementation  of  the  policy  conditions  set 
out in the MoU. 

(d)  Before the maximum amount of the support under the Instrument is disbursed, 
the Commission shall verify the fulfilment of all the policy conditions set out 
in the MoU. 

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Article 11 
Reduction, suspension and cancellation of the support under the Instrument 

1. 

2. 

If  the  funding  needs  of  Ukraine  decrease  fundamentally  during  the  period  of  the 
disbursement  of  the  Union’s  support  under  the  Instrument  compared  to  the  initial 
projections,  the  Commission  may  reduce  the  amount  of  the  support,  suspend  it  or 
cancel it. 

Where  the  requirements  set  out  in  Article  10(2) are  not  met,  the  Commission  shall 
suspend or cancel the disbursement of the support under the Instrument.  

Article 12 
Assessment of implementation of the support under the Instrument 

During  the  implementation  of  the  Instrument,  the  Commission  shall  assess,  by  means  of  an 
operational  assessment,  which  may  be  conducted  together  with  the  operational  assessment 
provided for under Decision (EU) 2022/1201 and Decision (EU) 2022/1628, the soundness of 
Ukraine’s financial arrangements, the administrative procedures, and the internal and external 
control mechanisms which are relevant to the assistance.  

Article 13 
Information to the European Parliament and to the Council 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of  developments 
regarding  the  Instrument,  including  disbursements  thereof,  and  developments  in  the 
operations  referred  to  in  Article  9,  and  shall  provide  those  institutions  with  the  relevant 
documents in due time. In case of suspension or cancellation pursuant to Article 11(2), it shall 
without  delay  inform  the  European  Parliament  and  the  Council  of  the  reasons  for  the 
suspension or cancellation. 

Chapter II 
Specific provisions related to the implementation of the support 

Article 14 
Borrowing and lending operations 

1. 

2. 

In  order  to  finance  the  support  under  the  Instrument  in  the  form  of  loans,  the 
Commission  shall  be  empowered,  on  behalf  of  the  Union,  to  borrow  the  necessary 
funds on the capital markets or from financial institutions in accordance with Article 
220(a) of Regulation (EU, Euratom) 2018/1046. 

The detailed terms of the support under the Instrument in the form of loans shall be 
laid  down  in  a  loan  agreement  in  accordance  with  Article  220  of  Regulation  (EU, 
Euratom)  2018/1046,  to  be  concluded  between  the  Commission  and  Ukraine.  The 
loans shall have a maximum duration of 35 years.  

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3. 

By  derogation  to  Article  31(3),  second  sentence  of  Regulation  (EU)  2021/947, 
macro-financial  assistance  provided  to  Ukraine  in  the  form  of  loans  under  this 
Instrument shall not be supported by the External Action Guarantee.  

No  provisioning  for  the  loans  under  this  Regulation  shall  be  constituted  and,  by 
derogation  to  Article  211(1)  of  the  Regulation  (EU,  Euratom)  2018/1046,  no 
provisioning  rate  as  a  percentage  of  the  amount  referred  to  in  Article  4(1)  shall  be 
set.  

Article 15 
Interest rate subsidy  

1. 

2. 

By  derogation  from  Article  220(5),  point  (e),  of  Regulation  (EU,  Euratom) 
2018/1046  and  subject  to  available  resources,  the  Union  may  bear  interest  by 
granting  an  interest  rate  subsidy  and  cover  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 Regulation.  

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

Article 16 
Financing agreement for non-repayable support 

The detailed terms of the non-repayable support referred to in Article 4(3) shall be laid down 
in  a  financing  agreement  to  be  concluded  between  the  Commission  and  Ukraine.  By 
derogation  from  Article  220  (5)  of  Regulation  (EU,  Euratom)  2018/1046,  the  financing 
agreement  shall  contain  only  provisions  referred  to  in  points  (a)  to  (c)  of  Article  220(5) 
thereof.  The  financing  agreement  shall  include  provisions  on  the  protection  of  the  Union’s 
financial  interests,  checks,  audits,  prevention  of  fraud  and  other  irregularities,  and  the 
recovery of funds.  

Chapter III 
Common and final provisions 

Article 17 
Committee procedure 

1. 

2. 

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

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

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Article 18 
Annual report 

1. 

The  Commission  shall  submit  to  the  European  Parliament  and  to  the  Council,  an 
assessment  of  the  implementation  of  Chapter  I,  including  an  evaluation  of  that 
implementation. That report shall: 

(a) 

(b) 

(c) 

examine  the  progress  made  in  implementing  the  Union’s  support  under  the 
Instrument; 

assess  the  economic  situation  and  prospects  of  Ukraine,  as  well  as  the 
implementation of the requirements and conditions referred to in Section 2 of 
Chapter I; 

indicate the connection between the requirements and conditions set out in the 
MoU,  Ukraine’s  ongoing  macro-financial  situation  and  the  Commission’s 
decisions to release the instalments of the support under the Instrument. 

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  support  under  the 
Instrument and the extent to which it has contributed to the aims of the assistance. 

Article 19 
Final provisions 

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

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE 

1.1.  Title of the proposal/initiative 

1.2.  Policy area(s) concerned 

1.3.  The proposal/initiative relates to: 

1.4.  Objective(s) 

1.4.1. General objective(s) 

1.4.2. Specific objective(s) 

1.4.3. Expected result(s) and impact 

1.4.4. Indicators of performance 

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 

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. 

1.5.3. Lessons learned from similar experiences in the past 

1.5.4. Compatibility  with  the  Multiannual  Financial  Framework  and  possible 
synergies with other appropriate instruments  

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

1.6.  Duration and financial impact of the proposal/initiative 

1.7.  Management mode(s) planned 

2.  MANAGEMENT MEASURES 

2.1.  Monitoring and reporting rules 

2.2.  Management and control system(s) 

2.2.1. Justification  of 
mechanism(s), the payment modalities and the control strategy proposed 

the  management  mode(s), 

funding 

the 

implementation 

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

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) 

2.3.  Measures to prevent fraud and irregularities 

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

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

3.2.  Estimated financial impact of the proposal on appropriations 

3.2.1. Summary of estimated impact on operational appropriations 

3.2.2. Summary of estimated impact on administrative appropriations 

3.2.3. Compatibility with the current multiannual financial framework 

3.2.4. Third-party contributions 

3.3.  Estimated impact on revenue 

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LEGISLATIVE FINANCIAL STATEMENT 

1.  FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1 Title of the proposal/initiative 

Proposal for a Regulation of the European Parliament and of the Council establishing 
an Instrument to provide support to Ukraine  

1.2 Policy area(s) concerned (Programme cluster) 

6. Neighbourhood and the World  

14. External Action 

Instrument to provide support to Ukraine (macro-financial assistance +) 

1.3 The proposal/initiative relates to:  

 a new action  

 a new action following a pilot project/preparatory action18  

 the extension of an existing action  

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

1.4 Objective(s) 

1.4.1 General objective(s) 

To provide short term financial relief, financing of rehabilitation and initial support 
towards  post-war  reconstruction,  with  a  view  to  supporting  Ukraine  on  its  path 
towards European integration. 

1.4.2 Specific objective(s) 

(a)  macro-financial stability, and to ease the Country's external and internal 

financing constraints; 

(b) 

a reform agenda gearing towards the early preparatory phase of the pre-
accession  process,  as  appropriate,  including  strengthening  Ukraine's 
institutions,  reforming  and  reinforcing  the  effectiveness  of  public 
administration  as  well  as  transparency,  structural  reforms  and  good 
governance at all levels 

(c) 

rehabilitation,  of  critical  functions  and  infrastructure  and  relief  for 
people in need; 

1.4.3 Expected result(s) and impact  

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

Support  Ukraine’s  economic  resilience  and  stability  under 

• 
circumstances. 

the  war 

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

18 

As referred to in Article 58(2)(a) or (b) of the Financial Regulation. 

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24 

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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, in view of pursuing integration to the EU. 

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. 

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 pre-
condition  as  well  as  policy  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  the 
MoU setting out reporting requirements. 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. 

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  responds  to  the need for  a common response in  providing  support to 
Ukraine on an adequate scale, which cannot be sufficiently achieved by the Member 
States alone and can be better achieved by the EU. The main reasons  are the fiscal 
capacity and budgetary constraints faced at the national level and the need for strong 
donor coordination in order to maximise the scale  and effectiveness of the support, 
while  limiting  the  burden  on  the  administrative  capacity  of  Ukrainian  authorities, 
which is very stretched in the current circumstances.  

The initiative is part of the EU’s objective to provide short term liquidity support to 
Ukraine.  It  reinforces  also  actions  by  the  Union  for  direct  humanitarian,  economic 
and defence support, as well as Union’s initiatives to coordinate multilateral actions, 
such  as  the  “Stand-up  for  Ukraine”.  By  its  very  nature,  it  is  also  a  catalyst  for 

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25 

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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  key  value  added  of  the  concessional  loans  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. 

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. 

1.5.4  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies  with 
other appropriate instruments 

The proposal is compatible with the ceilings of the 2021-2027 multiannual financial 
framework  (MFF).  The  support  in  the  form  of  loans  will  be  available  for  the  year 
2023. The resources for the instrument will be financed by borrowing (up to EUR 18 
billion for the loan-based support).  

The EU will provide an interest rate subsidy that will be financed from contributions 
from Member States as external assigned revenue to the EU budget. Therefore, this 
expenditure  will  not  impact  the  ceilings  of  the  2021-2027  multiannual  financial 
framework. 

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

The  Union’s  macro-financial  assistance  to  Ukraine  in  2022  has  been  generous  and 
effective. Yet, this assistance has been provided on an ad-hoc basis, covering a few 
months  at  a  time.  It  has  required  significant  provisioning  from  the  EU  budget  and 
national  guarantees.  Therefore,  a  more  structural  and  efficient  approach  to  the 
Union’s support to Ukraine in 2023 should be considered.  

This  proposal  sets  an  orderly  and  sustainable  framework  for  the  channelling  of 
financial  assistance  to  Ukraine,  while  offering  sufficient  flexibility  to  adjust  the 
support to the evolving funding needs of the country and preparing the ground for a 
future ‘Rebuild Ukraine’ Facility, in line with the Communication of 18 May 2022 
on “Ukraine Relief and Reconstruction”19 and the principles agreed in the Lugano’s 
Ukraine Reform Conference of July 2022. 

19 

COM/2022/233 final 

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To  avoid  having  to  repeatedly  seize  the  EU  and  national  legislators  on  financial 
support issues, the broad parameters of the Union’s relief and rehabilitation support 
should be decided for the whole of 2023.  

Further  pressure  on  a  strained  EU  budget  due  to  provisioning  requirements  and 
complex arrangements, involving a multitude of ad hoc national guarantees, should 
be  avoided.  A  unified  and  efficient  system  to  secure  the  best  borrowing  conditions 
and extend market access for loan support has major advantages in a context of rising 
costs and interest rates. 

1.6 Duration and financial impact of the proposal/initiative 

 limited duration  

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

–   Financial impact in 2023 for loan support, and during the repayment period for 
support in the form of interest rate subsidy, financed by external assigned revenue 
unless covered through other means in future multiannual financial frameworks. 

 unlimited duration 

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

–  followed by full-scale operation. 

1.7 Management mode(s) planned20  

 Direct management by the Commission 

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

–    by the executive agencies  

 Shared management with the Member States  

 Indirect management by entrusting budget implementation tasks to: 

–   third countries or the bodies they have designated; 

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

–   the EIB and the European Investment Fund; 

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

–   public law bodies; 

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

they are provided with adequate financial guarantees; 

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

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

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

20 

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

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– 

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

Comments  

N/A

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2.  MANAGEMENT MEASURES  

2.1 Monitoring and reporting rules  

Specify frequency and conditions. 

The  monitoring  and  reporting  obligations  under  the  Regulation  (EU,  Euratom) 
2018/1046 apply.  

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 (MoU).  

The  MoU  will  include  reporting  requirements  that  ensure,  in  particular,  the 
efficiency,  transparency  and  accountability  of  the  use  of  the  support  under  the 
Instrument. 

The Commission will verify, at regular intervals, the implementation of the reporting 
requirements and the progress made towards fulfilling the policy conditions set out in 
the  MoU.  The  Commission  will  inform  the  European  Parliament  and  the  Council 
about the results of that verification. 

The  Commission  will  submit  to  the  European  Parliament  and  to  the  Council  an 
assessment  of  the  implementation  the  Union’s  support  for  Ukraine,  including  an 
evaluation of that implementation. 

No later than two years after the end of the availability period, the Commission will 
submit  to  the  European  Parliament  and  to  the  Council  an ex-post evaluation  report, 
assessing  the  results  and  efficiency  of  the  completed  Union’s  support  under  the 
Instrument and the extent to which it has contributed to the aims of the assistance. 

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  proposal  will  be  implemented  under  direct 
management by the Commission, as it concerns financial support provided directly to 
the State.  

The  support  under  the  Instrument  will  be  made  available  by  the  Commission  in 
instalments,  each  of  which  shall  consist  of  a  loan  and,  if  available,  non-repayable 
support. 

Disbursements can be organised flexibly and swiftly in response to the needs of the 
Ukrainian authorities. They could be envisaged, for example, on a quarterly basis so 
as to minimise the administrative burden on the Ukrainian authorities. 

The  support  should  be  released  subject  to  the  respect  of  preconditions,  satisfactory 
implementation and progress towards the implementation of the policy conditions. 

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

There  are  political,  fiduciary  and  policy  risks  related  to  the  proposed  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 and administrative capacity.  

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There is a risk that the loans could be used in a fraudulent way. As the proposal 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 loans (default or credit risk), 
which  could  be  caused  for  example  by  a  significant  additional  deterioration  of  the 
balance  of  payments  and  fiscal  position  of  the  partner.  To  that  end,  following  the 
entry  into  force  of  this  amendment  of  Regulation  (EU,  Euratom)  2018/1046,  the 
Commission  will  adopt  and  implement  a  wider  governance  framework,  risk 
management procedures, and cost allocation methodology. 

Internal control systems  

The  operations  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.  During  the  implementation,  the  Commission  will  check 
periodically the partner’s declarations. The payment is subject to monitoring by the 
Commission’s  staff.  The  disbursement  relating  to  the  operations  may  be  subject  to 
additional  independent  ex-post  (documentary  and/or  on-the-spot)  verifications  by 
officials  of  the  ex-post  control  team  of  the  relevant  Commission  department.  Such 
verifications may also be initiated at the request of the responsible authorising officer 
by  sub-delegation.  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  loan  and  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  the  macro-
financial  assistance  type  of  payments  so  far  of  0%.  There  are  no  known  cases  of 
fraud,  corruption  or  illegal  activity.  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. 
A  Loan  Agreement  to  be  concluded  between  the  Commission  and  Ukraine  in 
accordance with  Article  220 of Regulation  (EU,  Euratom) 2018/1046.  The detailed 
terms  of  any  non-repayable  support  made  available  in  addition  to  the  interest  rate 
subsidy  shall  be  laid  down  in  a  financing  agreement  to  be  concluded  between  the 
Commission and Ukraine.  

The  agreements  will  provide  a  set  of  provisions  on  inspection,  fraud  prevention, 
audits and recovery of funds in case of fraud or corruption. In particular, the loan and 
financing  agreements  will  include  provisions  for  the  Commission  to  carry  out 

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checks,  for  the  Court  of  Auditors  to  carry  out  audits  and  for  the  European  Public 
Prosecutor’s Office to exercise its competences, in accordance with Articles 129 and 
220 of Regulation (EU, Euratom) 2018/1046. 

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. 

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3.  ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

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

  New budget lines requested  

In order of multiannual financial framework headings and budget lines. 

Heading of 
multiannual 
financial 
framework 

Number  

Budget line 

Type of 
expenditure 

Contribution  

Diff./Non-
diff. 

from 
EFTA 
countries 

from 
candidate 
countries 

from third 
countries 

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

6 

New line for interest rate subsidy 

New  line  for  support  expenditure  under 
Article 4(4) 

New line for non-repayable support under 
Article 4(3)  

Diff 

Non-diff 

Diff 

YES 

YES 

YES 

YES 

EN 

32 

  EN 

 
 
 
3.2 Estimated financial impact of the proposal on appropriations  

3.2.1 Summary of estimated impact on operational appropriations  

The proposed expenditure linked to the Instrument for providing support to Ukraine will be covered by a 
maximum amount of EUR 18 000 000 000 in the form of loans stemming from borrowing operations of 
the Union.  

Amounts  stemming  from  specific  voluntary  contributions  from  Member  States  (as  external  assigned 
revenue) would be used for the following purposes:  

support to loans’ interest costs subsidy– no target volume can be set in advance as these costs will depend 
on the actual interest on the loans; 

 

 

activities covered by the Memorandum of Understanding of the Instrument; 

be rechannelled to the Neighbourhood, Development and International Cooperation Instrument – 
Global Europe (NDICI) and/or Humanitarian Aid for activates benefitting Ukraine. 

Moreover,  third  countries  and  parties  may  make  available  extra  resources  to  those  described  above,  as 
external assigned revenue to contribute to the Memorandum of Understanding of the Instrument or to be 
rechannelled to NDICI and/or Humanitarian Aid for activates benefitting Ukraine. 

Instrument for providing support to 
Ukraine 

(assumption: commitment appropriations 
equal payment appropriations) 

  Operational appropriations (of which) 

Year 
2023 

Year 
2024 

Year 
2025 

Year 
2026 

Year 
2027 

Loans  

18 000 000 000 

Non-repayable support to cover the interest rate 
subsidy 
Additional  contributions 
support 

for  non-repayable 

pm 

pm 

- 

pm 

pm 

- 

pm 

pm 

- 

pm 

pm 

- 

pm 

pm 

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. 

EUR million (to three decimal places) 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as 
necessary to show the 
duration of the impact 
(see point 1.6)  

TOTAL 

DG: <…….> 

 Human resources  

 Other administrative expenditure  

EN 

33 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL DG <…….> 

Appropriations  

TOTAL appropriations 
under HEADING 7 
of the multiannual financial 
framework  

(Total 
commitments  = 
Total payments) 

EN 

34 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.2 Summary of estimated impact on administrative appropriations  

–  The  proposal/initiative  does  not  require  the  use  of  appropriations  of  an 

administrative nature  

–    The proposal/initiative requires the use of appropriations of an administrative 

nature, as explained below: 

EUR million (to three decimal places) 

Year 
2023 21 

Year 
2024 

Year 
2025 

Year 
2026 

Year 
2027 

TOTAL 

HEADING 7 
of the multiannual 
financial framework 

Human resources  

Other administrative 
expenditure  

Subtotal HEADING 7 
of the multiannual 
financial framework  

Outside HEADING 722  
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 7 
of the multiannual 
financial framework  

pm 

pm 

pm 

pm 

pm 

pm 

pm 

pm 

pm 

pm 

pm 

pm 

TOTAL 

pm 

pm 

pm 

pm 

pm 

pm 

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. 

21 

22 

Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the expected first 
year of implementation (for instance: 2021). The same for the following years. 
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 

35 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Estimated requirements of human resources  

–    The proposal/initiative does not require the use of human resources.  

–  The proposal/initiative requires the use of human resources, as explained below: 

Estimate to be expressed in full time equivalent units 

2023 

2024 

2025 

Enter as many years as 
necessary to show the duration 
of the impact (see point 1.6) 

 Establishment plan posts (officials and temporary staff) 

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

20 01 02 03 (Delegations) 

01 01 01 01 (Indirect research) 

 01 01 01 11 (Direct research) 

Other budget lines (specify) 

 External staff (in Full Time Equivalent unit: FTE)23 

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

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

14 01 06 24 

- at Headquarters 

- in Delegations  

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

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

Other budget lines (specify) 

TOTAL 

 External staff (in Full Time Equivalent unit: FTE) - AC, AL, 
END, INT and JED 25 

Other budget line: Assigned revenue  

Financed from assigned revenue – at Headquarters 

Financed from assigned revenue – in Delegation 

TOTAL 

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 

External staff 

23 

24 
25 

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). 
AC=  Contract  Staff;  AL  =  Local  Staff;  END  =  Seconded  National  Expert;  INT  =  agency  staff; 
JPD= Junior Professionals in Delegations.  

EN 

36 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3 Compatibility with the current multiannual financial framework  

Loans will be funded from borrowings of the EU on the financial markets.  

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

Multiannual Financial Framework (MFF). 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. Please provide an excel table in the case of major reprogramming. 

–    requires use of the unallocated margin under the relevant heading of the MFF 

and/or use of the special instruments as defined in the MFF Regulation. 

Explain  what  is  required,  specifying  the  headings  and  budget  lines  concerned,  the  corresponding 
amounts, and the instruments proposed to be used. 

–    requires a revision of the MFF. 

The initiative requires a targeted adjustment to the MFF Regulation to allow for loans to Ukraine to be 
backed up by a guarantee from the EU budget headroom, i.e. the budgetary space above the ceiling for 
payments of the multiannual financial framework (MFF) up to the limits of the own resources ceiling. 
This  will  provide  a  high  degree  of  protection  and  reassurance  to  investors,  avoid  the  costly 
establishment  of  national  guarantees,  without  changes  to  the  size  or  ceilings  of  the  MFF.  This 
necessitates  a  limited  amendment  of  MFF  Regulation  (EU,  Euratom)  2020/2093  that  will  allow 
contingent liabilities stemming from financial assistance to  Ukraine to be treated in the same way as 
financial  assistance  for  Member  States.  Such  limited  amendment  does  not  revise  the  applicable 
ceilings of the MFF 2021-2027. 

3.2.4 Third-party contributions  

The proposal/initiative: 
–    does not provide for co-financing by third parties26 

–  provides for the co-financing by third parties estimated below: 

Appropriations in EUR million (to three decimal places) 

Year 
N27 

Year 
N+1 

Year 
N+2 

Year 
N+3 

Enter as many years as necessary 
to show the duration of the 
impact (see point 1.6) 

Total 

Specify  the  co-financing 
body  

TOTAL appropriations 
co-financed  

26 
27 

Third parties contributions will be in the form of assigned revenue presented in the section below. 
Year N is the year in which implementation of the proposal/initiative starts. Please replace "N" by the 
expected first year of implementation (for instance: 2021). The same for the following years. 

EN 

37 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3 Estimated impact on revenue  

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

–  The proposal/initiative has the following financial impact: 

– 

– 

– 

 

on own resources  

on other revenue 

please indicate, if the revenue is assigned to expenditure lines  

Budget revenue line: 

Appropriations 
available for 
the current 
financial year 

Year 
N 

Year 
N+1 

Year 
N+2 

p.m. 

p.m. 

p.m. 

p.m. 

Year 
N+3 

p.m. 

Enter as many years as necessary to show 
the duration of the impact (see point 1.6) 

p.m. 

p.m. 

p.m. 

     EUR million (to three decimal places) 

Impact of the proposal/initiative28 

For assigned revenue, specify the budget expenditure line(s) affected. 

See section 3.2.1 above 

28 

As regards traditional own resources (customs duties, sugar levies), the amounts indicated must be net 
amounts, i.e. gross amounts after deduction of 20 % for collection costs. 

EN 

38 

  EN