Council of the EU,update

 

Press material Tuesday, 06 August 2024

● Council of the EU   06/08/2024 13:15 | Press release | Council gives green light to first payment of nearly €4.2 billion under the Ukraine Facility   Ukraine is set to receive close to €4.2 billion in funds after the Council greenlighted the first regular payment of grants and loans under the EU's Ukraine Facility, to support Ukraine's macro-financial stability and the functioning of its public administration.  In a decision adopted today, the Council concluded that Ukraine had satisfied the necessary conditions and reforms envisaged in the Ukraine Plan for receiving the funds, which will be disbursed from the Ukraine Facility. These reforms cover public financial management, governance of state-owned enterprises, business environment, energy and demining. It also stressed the importance of allocating the money as soon as possible, given the difficult fiscal situation in Ukraine. The Ukraine Plan sets out Ukraine’s intentions regarding the recovery, reconstruction and modernisation of the country and the reforms it plans to undertake as part of its EU accession process in the next four years. In May 2024 the Council concluded that the Ukraine Plan fulfilled the preconditions for Ukraine to receive up to €50 billion in support under the Ukraine Facility. Background and next steps The Ukraine Facility, which entered into force on 1 March 2024, foresees up to €50 billion of stable financing, in grants and loans, to support Ukraine's recovery, reconstruction, and modernisation for the period 2024 to 2027. Of this, up to €32 billion is indicatively earmarked to support reforms and investments set out in the Ukraine Plan, whereby disbursements will be conditioned to the delivery of identified indicators. Since its entry into force, the Ukraine Facility has already disbursed €6 billion by way of bridge financing and €1.89 billion in pre-financing, after fulfilment of agreed policy conditions. In the Ukraine Plan submitted on 20 March 2024, Ukraine outlined its vision for reconstruction, modernisation and the reforms it intends to undertake as part of its EU accession process. The plan emphasizes structural reforms and investments in the sectors with the largest growth potential. It addresses improvements in public administration, emphasising good governance, adherence to the rule of law and the fight against corruption and fraud. In its assessment dated 15 April 2024, the Commission confirmed that the Ukraine Plan meets the criteria established by the Ukraine Facility Regulation, and presented an in-depth and extensive analysis covering the impact of the war of aggression of Russia on Ukraine, the macroeconomic outlook for the country, and challenges linked to Ukraine’s recovery, reconstruction and modernisation, including the need for external funding, increased labour force, government’s capacity to implement reforms as well as transparency and accountability at all stages. If all proposed reforms and investments are fully implemented, the estimate is that Ukraine's GDP could increase by 6.2% by 2027 and by 14.2% by 2040 and could also lead to a reduction of the debt by about 10 percentage points of GDP by 2033. On 14 May 2024 the Council adopted an implementing decision enabling regular payments to begin under the Ukraine Plan. Following the European Commission assessment of the payment request submitted by Ukraine on 9 July 2024, the Council concluded that Ukraine has satisfactorily fulfilled reform envisaged in the Ukraine Plan. Today’s implementing decision authorises the first of these payments to take place. Council implementing decision Annex to the Council implementing decision Ukraine Plan: Council greenlights regular payments under the Ukraine Facility (press release, 14 May 2024) Ukraine Facility: Council and Parliament agree on new support mechanism for Ukraine (press release, 6 February 2024) EU solidarity with Ukraine (background information) The Ukraine Facility (background information)