BRUSSELS – The Ukrainian government and European Commission will on Sept. 14 sign a memorandum of understanding on a new assistance program for Ukraine worth up to 1 billion euros, European Union officials said on Sept. 11.
Valdis Dombrovskis, the vice president of the European Commission responsible for economic and financial affairs, is to travel to Kyiv to participate in the signing ceremony.
A staffer from Dombrovskis’ office told the Kyiv Post that the 1 billion euros would be split into two tranches of 500 million euros each. The first tranche will be disbursed later this autumn, and second by March next year. The program is to end in March 2019.
The 1 billion euros in financial assistance is to help the country service its debts and to step up its reform efforts. However, it comes with some conditions: The European Parliament, in light of Ukraine’s unfulfilled commitments in the fight against corruption, and the related cancellation of the third installment of the previous program of EU macro-financial assistance, has stipulated that further macro-financial assistance will be conditional on further progress in the fight against corruption in Ukraine.
A total of 527 out of 680 members of the European Parliament voted for a resolution with this stipulation on June 13.
According to the European Parliament’s resolution, the economic policy and financial conditions of the memorandum of understanding to be agreed between the EU and Ukraine will include obligations for Kyiv to strengthen governance, administrative capacities, and institutions, in particular for the fight against corruption in Ukraine.
Proposed measures include a verification system for asset declarations, the verification of companies’ beneficial ownership data, and a well-functioning specialized anti-corruption court in line with the recommendations of the Venice Commission. Conditions on combating money laundering and tax avoidance will also be considered.
The details of the memorandum agreed between Ukraine and the commission are not yet known, but if Ukraine fails to meet its conditions, the European Parliament says it will demand that the commission temporarily suspend or cancel the disbursement of the EU’s macro-financial assistance to Ukraine.
This happened with the previous, third program when the last tranche was not disbursed because Kyiv failed to meet four of 21 commitments. These four commitments, as earlier indicated by the European Commission, will definitely be included in the new Memorandum of Understanding, and will include a fresh demand that Ukraine lifts a ban on timber exports, which the EU believes restricts free trade.
Ukraine put the ban in place in an effort to combat illegal logging in Ukraine.
