Timothy Ash: EU approves new 1 billion euro aid package to Ukraine as Mogherini comes to Kyiv - Mar. 09, 2018

With the European Union’s High Representative of the European Union for Foreign Affairs and Security Policy Federica Mogherini coming to Kyiv on March 11-12, a new 1 billion euro financial aid package gives her something to sign off on.

This is a new program, or rather re-packaging the 600 million euros left over from the last 1.8 billion euros macro-financial assistance program, which was not disbursed due to reform backtracking on e-declarations and then timber exports. They are throwing in another 400 million euros to make it up to a nice round number, with the program likely to extend out to 2019 and the end of the current International Monetary Fund program.

Ukraine’s Ministry of Finance wanted 1.8 billion euros but got the reduced amount of 1 billion euros.

These monies are not being disbursed yet, but will be linked to sorting out the issues remaining with the last program, plus also holding to IMF conditionality, which means the first tranche will not come until the long-delayed (11 months now) latest review of the IMF program gets done. Therein the key issues still remain sign off on a truly independent anti-corruption court and gas price hikes.

The Danes are currently leading the E.U. coordination effort and there is supposed to be a donor reform conference on June 27 in Copenhagen, so the hope there is that by giving the Ukrainians a bit more carrot that they will finally pull their fingers out on the anti-corruption court and gas price hikes, plus other things to be done on the reform front.