Ukraine

On 14 June 2024, the leaders of the G7 countries announced the Extraordinary Revenue Acceleration (ERA) Loans for Ukraine initiative, aimed at mobilising around USD 50 billion in additional financial support to Ukraine by the end of the year. As part of this initiative, the European Commission adopted a proposal for an exceptional macro-financial assistance (MFA) for Ukraine, in the form of very concessional loans. The European Parliament and the Council adopted Regulation (EU) 2024/2773 establishing the Ukraine Loan Coordination Mechanism (ULCM) on 24 October 2024, ensuring coordinated support from EU and G7 partners. The EU contribution (macro-financial assistance) to the ERA loan initiative amounts to up to €18.1 billion, extended with a view to supporting Ukraine’s financing needs. A key innovation of the MFA is that its servicing and repayment will be covered by extraordinary revenues stemming from Russia’s immobilised sovereign assets, sending a clear signal that the burden of rebuilding Ukraine will be shouldered by those responsible for its destruction. The release of the EU macro-financial assistance was approved in December 2024, following the satisfactory implementation of specific policy measures set out in the Memorandum of Understanding. The assistance is being disbursed in tranches throughout 2025, conditional on Ukraine’s continued respect for effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and respect for human rights, including the rights of persons belonging to minorities.

On 9 November 2022, the European Commission adopted a proposal to provide €18 billion of support in the form of loans to Ukraine for 2023 through a new MFA + instrument. The European Parliament and the Council adopted the Regulation on MFA+ instrument on 14 December 2022. Negotiations between the Commission, on behalf of the EU, and Ukraine on the conditionality attached to the disbursement of the assistance concluded successfully. The Commission and Ukraine signed the Memorandum of Understanding and the Loan Facility Agreement on 16 January, both of which entered into force on the same day.

The disbursement of the first instalment of EUR 3 billion took place on 17 January 2023 and was conditional on the continued fulfilment of the political precondition and the satisfactory implementation of the enhanced reporting requirements for the MFA+ set out in the MoU. The disbursement of the following instalments was additionally linked to progress in implementing the structural policy conditions agreed in the MoU. The second instalment of EUR 1.5 billion was disbursed on 21 March. The third instalment was provided in three tranches of EUR 1.5 billion that were disbursed on 25 April, 23 May and 22 June, respectively. The fourth instalment was disbursed in monthly tranches of EUR 1.5 billion each on 25 July, 22 August and 22 September. The fifth and penultimate instalment provided for two monthly tranches of EUR 1.5 billion each with disbursements taking place on 23 October and 22 November. The final disbursement of EUR 1.5 billion was conditional on the completion of all conditions agreed in the MoU (rather than on progress towards their implementation, as had been the case for preceding instalments) and took place on 21 December 2023.

• Regulation (EU) 2022/2463 of the European Parliament and of the Council of 14 December 2022 establishing an instrument for providing support to Ukraine for 2023 (macro-financial assistance +)

As a part of the Union’s extraordinary support to Ukraine, namely to finance the immediate funding needs following the unprovoked and unjustified aggression by Russia, the Commission proposed on 1 July 2022 a new €1 billion MFA operation for Ukraine in in the form of a highly concessional long-term loan. This proposal is the first part of the exceptional MFA support of up to €9 billion announced in the Commission’s communication on Ukraine Relief and Reconstruction of 18 May 2022 and endorsed by the European Council of 23-24 June 2022. The exceptional MFA aims to provide immediate financial assistance in a situation of acute funding needs and to ensure the continued functioning of the most critical functions of the Ukrainian state.

The European Parliament and the Council adopted the Decision on 12 July 2022. The Commission and Ukraine signed the related Memorandum of Understanding on 19 July, which enabled a disbursement of the whole amount of this MFA in two tranches in early August 2022.

On 7 September 2022, the Commission proposed a new MFA operation of EUR 5 billion in loans under the exceptional MFA package. The MFA Decision was adopted by the European Parliament and Council on 20 September 2022. After the entry into force of the Memorandum of Understanding on 4 October, a first instalment of EUR 2 billion was disbursed to Ukraine on 18 October. The second disbursement of EUR 2.5 billion followed on 22 November 2022. The third and last payment of EUR 500 million took place on 14 December 2022.

• 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 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
• Decision (EU) 2022/1201 of the European Parliament and of the Council of 12 July 2022 providing exceptional macro-financial assistance to Ukraine
• European Council Conclusions of 23 June
• Communication of 18 May 2022 on Ukraine relief and reconstruction

In the context of the escalating geopolitical tensions preceding Russia’s invasion of Ukraine, on 1 February 2022 the European Commission adopted a proposal for a Decision on providing a new emergency Macro-Financial Assistance (MFA) to Ukraine for up to EUR 1.2 billion in loans, to be disbursed in two equal instalments. The European Parliament and the Council adopted the Decision on 24 February 2022, thereby authorising the sixth MFA operation in Ukraine since 2014. The Commission and Ukraine signed the related Memorandum of Understanding on 3 March, which enabled a disbursement of the first instalment of EUR 600 million in two tranches on 11 and 18 March 2022.

The outbreak of the war impeded the capacity of the Ukrainian state to implement the limited set of structural policy measures associated with the second instalment of the assistance. The Commission decided, nevertheless, to disburse the second instalment on 20 May given that the fulfilment of the conditionality had been impeded by force majeure, which the Member States endorsed.

• Decision of the European Parliament and the Council of 24 February 2022
• Commission proposal for an emergency MFA to Ukraine
• Ex-ante evaluation statement (staff working document)

On 22 April 2020, the Commission adopted a proposal for a €3 billion MFA package to ten enlargement and neighbourhood partners to help them limit the economic fallout of the coronavirus pandemic. The decision was adopted by the European Parliament and the Council of the EU on 25 May 2020. As part of this package, the EU agreed on a MFA programme of EUR 1.2 billion to Ukraine. The first instalment was disbursed on 9 December 2020. The second and last instalment was disbursed on 25 October 2021, thereby successfully completing the programme. 

• Memorandum of Understanding between the European Union and Ukraine
• Decision (EU) 2020/701 of the European Parliament and of the Council of 25 May 2020 on providing macro‐financial assistance to enlargement and neighbourhood partners in the context of the COVID‐19 pandemic
• Commission Staff Working Document on providing Macro-Financial Assistance to enlargement and neighbourhood partners in the context of the COVID-19 pandemic crisis Accompanying the document Proposal for a Decision of the European Parliament an the Council on providing Macro-Financial Assistance to enlargement and neighbourhood partners in the context of the COVID-19 pandemic crisis
• Commission proposal on providing MFA in the context of the COVID-19 pandemic

Following the Ukrainian authorities' request  for additional MFA to help the country cover its external financing needs, the Commission adopted a proposal for a fourth consecutive MFA programme for Ukraine of up to EUR 1 billion on 9 March 2018.  This new programme aims at supporting economic stabilisation and accelerated reform implementation in the country. The European Parliament and the Council adopted the Decision on the fourth MFA programme for Ukraine on 4 July 2018. The two tranches of EUR 500 million each were disbursed in November 2018 and May 2020. With these disbursements, the EU has now provided Ukraine with €3.8 billion in MFA loans since 2014. This is the largest amount of MFA the EU has disbursed to any single partner country.

Key documents relating to MFA IV

• Memorandum of Understanding between the European Union and Ukraine for Macro-Financial Assistance to Ukraine of up to EUR 1 billion
• Joint ex-post evaluation of Macro-Financial Assistance (MFA) operations to Georgia, Moldova and Ukraine (2017-2020)
• Decision (EU) 2018/947 of the European Parliament and of the Council of 4 July 2018 providing further macro-financial assistance to Ukraine
• Commission staff Working Document Ex-ante evaluation statement on EU macro-financial assistance to Ukraine Accompanying the document Proposal for a Decision of the European Parliament of the Council providing further macro-financial assistance to Ukraine’
• Commission proposal for EU macro-financial assistance to Ukraine

Faced with a deep economic recession and a severe confidence crisis due to the protracted armed conflict in the Eastern part of the country, Ukraine requested additional financial assistance from the EU and other international partners in late 2014. On 8 January 2015, the Commission adopted a proposal for a third MFA programme for Ukraine of up to EUR 1.8 billion, in order to alleviate the country's large external financing needs and to support the ambitious reform programme of the authorities. The European Parliament and the Council adopted the Decision on the third MFA programme for Ukraine on 15 April 2015. The first tranche under this programme (EUR 600 million) was disbursed on 22 July 2015, while the second tranche (also EUR 600 million) was disbursed on 4 April 2017. A third tranche of EUR 600 million could have been disbursed to Ukraine subject to the implementation of 21 policy measures jointly agreed with the Ukrainian authorities. Although Ukraine fulfilled 17 policy commitments attached to this instalment, four measures, including two related to the fight against corruption, had not been implemented by the time the availability period of the assistance expired in January 2018. Under these circumstances, the Commission was not in a position to disburse the last instalment under MFA III.

Key documents relating to MFA III:

• Ex post evaluation of MFA operations in Ukraine
• Memorandum of Understanding between the European Union and Ukraine for Macro-Financial Assistance to Ukraine of up to EUR 1.8 billion
• Decision of the European Parliament and the Council of 15 April 2015 providing Macro-Financial Assistance to Ukraine (EUR 1.8 billion)
• COMMISSION STAFF WORKING DOCUMENT Ex-ante evaluation statement on EU macro-financial assistance to the Republic of Ukraine Accompanying the document Proposal for a Decision of the EUROPEAN PARLIAMENT and of the COUNCIL providing macro-financial assistance to Ukraine
• Commission proposal for EU macro-financial assistance to Ukraine

In light of political developments in early 2014 and of the acute balance-of-payments crisis experienced by Ukraine, the Commission proposed on 19 March 2014 a second MFA operation of up to EUR 1 billion. This proposal was accompanied by a detailed evaluation of the economic challenges facing Ukraine and of the objectives pursued through the MFA operation. It was endorsed through a decision adopted by the Council on 14 April 2014. The two tranches of EUR 500 million each were disbursed in June and December 2014.

Key documents relating to MFA II:

• Ex post evaluation of Macro Financial Assistance Operations I & II to Ukraine
• Memorandum of Understanding between the European Union and Ukraine for Macro-Financial Assistance for Ukraine of up to EUR 1 billion
• Council decision of 14 April 2014 providing Macro-Financial Assistance to Ukraine (EUR 1 billion)
• Commission Staff Working Document Ex-ante evaluation statement on EU macro-financial assistance to Ukraine Accompanying the document Proposal for a Decision of the Council providing macro-financial assistance to Ukraine
• Commission proposal for EU Macro-Financial Assistance to Ukraine