Within the cooperation between Ukraine and EU during 2014 – 2017, three Macro-Financial Assistance programs were implemented.
The programs were implemented according to credit agreements concluded in 2013, 2014 and 2015 and memorandums of understanding ratified by Verkhovna Rada.
As a result of implementation of the aforementioned agreements Ukraine had received:
- all planned funds within MFA-І and MFA-ІІ programs: 1,360 billion EUR in 2014 and 250 mln EUR in 2015;
- the first and the second tranches whithin MFA-ІІІ: 1,2 billion EUR in 2015 (600 million EUR) and 2017 (600 million EUR);
The aforementioned funds were transfered to the balance of the Treasury in NBU and according to the provisions of the memorandums were used for decresing financial pressure on Ukraine and to ensure budget needs.
On 9 July 2018 the legislative decision of the European Parliament and the Council of the EU on the provision of Ukraine's fourth macrofinancial assistance program to the EU in the amount of 1 billion euro (MFD-4) came into force.
As a result of the consultations, the parties signed an appropriate Memorandum of Understanding and the Loan Agreement between Ukraine and the EU on 14.09.2018 (regarding Ukraine receiving EU macrofinancial assistance in the amount of up to 1 billion euros).
The law of Ukraine regarding the ratification of these international treaties was made on November 8, 2018, and on July 30, 2018 it came into force.
The purpose of the assistance is to support economic stabilization in Ukraine (by securing Ukraine's external financing needs in 2018 - 2019 through medium and long-term loans) and reform programs.
The assistance under the new program is allocated in the amount of up to 1 billion EUR by two tranches, with the allocation of both tranches conditioned by the need to complete the list of actions provided in Memorandum of understanding agreed between the Parties. .
As a usual practice for EU Macro-Financial Assistance instrument, the payments will be dependant to satisfactory assessments of the implementation of the IMF program.
Memorandum of understanding defines preconditions for the allocation of funds, in particular the general conditions - satisfactory implementation of the agreements reached between Ukraine and the IMF, as well as the positive results of the EU assessment of success in conducting a list of structural reforms agreed by the parties.
The list of measures for implementation of structural reforms provided for by the Memorandum consists of 6 conditions for the 1st tranche and 12 for the 2nd, the implementation of which is necessary for receiving assistance, in particular in the following areas:
- management of public finances;
- good governance;
- fight against corruption;
- sectoral reforms;
- state-owned enterprises;
- social policy.
The Loan Agreement defines the technical aspects of providing the borrowed funds.
According to the results of the assessment by the Ukrainian side of the implementation of the 6th conditions of the first tranche on 30.11.2018, the European Commission approved a positive decision to grant Ukraine a loan of 500 million euros.
On December 11, 2011, Ukraine received the first tranche of the fourth macrofinancial assistance program of the EU with a nominal amount of 500 million euro (net refinancing amounting to 510.854 million euros) in the form of a loan at an interest rate of 1.25% with a maturity date of April 2033.