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brussels [Belgium]Sept. 7 (ANI): The European Commission on Wednesday proposed a 5 billion-euro Macro Financial Assistance (MFA) loan to Ukraine, the European Commission said in a press release on Wednesday.
This is the second part of a special MFA package of up to €9 billion announced by the European Commission in a communication dated May 18, 2022 and approved by the European Council on June 23-24, 2022.
The European Commission paid the first €1 billion of the MFA package in early August. The remaining up to 3 billion euros will be provided as soon as possible.
According to the press release, the proposal is part of an extraordinary effort by the EU and the international community to help Ukraine address soaring financial needs following “unprovoked and unreasonable Russian aggression.”
The proposal would complement support already provided by the EU, including a €1.2bn emergency MFA loan disbursed in the first half of this year. Taken together, the two aspects of the plan would bring total foreign ministry support to Ukraine since the war began to 7.2 billion euros, and could reach 10 billion euros once the full package for Ukraine’s special foreign ministry is put into use this year.
According to the proposal, funds from the Ministry of Foreign Affairs will be provided to Ukraine in the form of long-term loans on favorable terms, to be paid in instalments. In a further expression of solidarity, the EU budget will cover the interest costs and administrative costs associated with the loans.
For all previous Ministry of Foreign Affairs loans, the European Commission will borrow funds on the international capital market and transfer the proceeds to Ukraine on the same terms. The loan to Ukraine will be backed by guarantees from member states, which will complement allocations in the EU budget. Between EU budget provisions and member state guarantees, the loan will be fully guaranteed at 70% of its value.
“As soon as the European Parliament and the Council approve today’s proposal and sign the corresponding memorandum of understanding and loan agreement with the Ukrainian authorities, the European Commission will quickly provide 5 billion euros,” it added.
This financial aid is in addition to the unprecedented support the EU has provided so far, notably humanitarian and developmental aid from the EU budget, military aid through the European Peace Fund, a one-year suspension of all import duties on Ukrainian exports or other solidarity Initiatives such as addressing transportation bottlenecks to secure exports, especially of grains.
President Ursula von der Leyen said: “The EU’s support for Ukraine is unwavering. We stand with the brave people with our hearts, our thoughts and our actions. Today, the European Commission proposes A further macroeconomic proposal of 5 billion euros. Financial aid to support Ukraine in addressing the urgent financial needs caused by the brutal Russian invasion. Ukraine must win this war: it must regain the freedom and independence for which it fought so valiantly “The EU will continue to do everything in its power to ensure this happens – unity will prevail and peace will come.”
In addition, Valdis Dombrovskis, executive vice president of an economy for the people, pointed out that “Ukraine is an economy at war, and due to Russia’s long war of aggression, maintaining day-to-day operations requires enormous effort. The cost. Ukraine urgently needs long-term support to maintain essential public services in the short term and achieve a degree of economic and financial stability. With a further special macro-financial aid of EUR 5 billion, the EU reaffirms its commitment to support Ukraine. We call on EU member states to move quickly Provide additional guarantees. This will be the second part of a €9 billion special macro-financial aid package announced by the European Commission.
“Today’s unprecedented macro-financial aid spending is another clear example of the EU’s support for the Ukrainian people and their institutions against Russian aggression. With this additional support, the EU will continue to help build a modern, democratic, independent Ukraine,” said Josep Borrell , Senior Representative/Vice-Chair of World Stronger Europe.
In recent years, the European Union has provided substantial aid to Ukraine under its MFA program. Since 2014, the EU has provided Ukraine with more than 5 billion euros through five foreign ministry projects to support a broad reform agenda in areas such as fighting corruption, an independent judiciary, the rule of law and improving the business environment.
In addition, the European Commission approved a €1.2 billion emergency MFA loan earlier this year, and the European Commission raised funds through two private placements in the first half of 2022.
In a communication on May 18, the European Commission laid out the EU’s plans for an immediate response to Ukraine’s funding gap, in particular through a special MFA package of up to 9 billion euros and a long-term reconstruction framework. According to the press release, the first special foreign ministry package of 1 billion euros will be paid in two tranches on August 1-2.
The Macro Financial Aid (MFA) business is part of the EU’s wider engagement with neighbouring countries and is intended as a special EU crisis response tool. They are available to EU neighbours experiencing serious balance of payments problems. In addition to the Ministry of Foreign Affairs, the EU supports Ukraine through several other instruments, including humanitarian aid, budget support, thematic programmes, technical assistance and hybrid facilities to support investment. (ANI)
(This is an unedited and auto-generated story from the Syndicated News feed, the body of the content may not have been modified or edited by LatestLY staff)
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