On 1 July, the European Commission proposed a new €1 billion macro-financial assistance (MFA) operation for Ukraine as the first part of the exceptional MFA package of up to €9 billion. This package was announced by the Commission on 18 May 2022 and endorsed by the European Council on 23-24 June 2022.
Under the proposal, MFA funds will be made available to Ukraine in the form of long-term loans on favourable terms. This will support Ukraine’s macroeconomic stability and overall resilience in the context of Russia’s military aggression and the ensuing economic challenges. In a further expression of solidarity, the EU budget will cover the interest costs on this loan.
“With this proposal, we continue to make best use of the EU budget to support our neighbour and ally Ukraine under the current extremely challenging circumstances,” said Johannes Hahn, Commissioner for Budget and Administration. “We count on rapid agreement by the European Parliament and Council which would enable us to make the first payment to Ukraine swiftly faced with urgent funding needs.”
This financial assistance is in addition to the unprecedented support the EU has provided to date, such as humanitarian, development and defence aid, the suspension of all import duties on Ukrainian exports for one year and other solidarity initiatives, for example to remove transport bottlenecks to ensure exports, particularly grain exports.
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