The European Commission has decided not to transfer the third and last 600 million euro tranche of the current 1.8 euro macro-financial assistance program to Ukraine, approved in 2015.
The European Union’s decision was made because the Ukrainian government has failed to fulfill the four last conditions the European donors set for the disbursal of the low-interest loan. The authorities failed to cancel the timber trade moratorium, launch an automatic system for checking electronic asset declarations, and a system for checking the beneficial owners of companies, and adopt the law on the credit register of the National Bank of Ukraine.
The program expires in January 2018, but the EU is ready to send proposals on a new bailout program early in 2018 after it evaluates reforms in the country as it is generally satisfied by the progress made by Ukraine.
“Ukraine has fulfilled a large share of the important conditions agreed with the EU, reads, a European Commission press service message published on Dec. 1.
This includes increasing transparency in public finances management, public administration, judicial and governance reform, advanced reforms of the energy sectors, improving the business climate, and much more.
“However, four of the measures linked to the final tranche currently remain outstanding, so the commission will not disburse the last tranche of the current program. We encourage Ukraine to maintain the reform momentum in the many areas that have progressed well, and complete the measures outstanding under the current program,” the European Commission’s statement reads.
The European Commission said it was ready to consider further assistance in Ukraine, but Ukrainian government must conduct reforms first.
Hugues Mingarelli, European Union ambassador to Ukraine, warned that Ukraine might lose the third tranche in an interview with the European Pravda news website on Nov. 22.
To get the last tranche from the EU in December, Ukraine had to fulfill several demands and show visible results in October.
However, Mingarelli said that as of November Ukraine still hadn’t fulfilled four of them: canceling the timber trade moratorium, launching the automatic system for checking electronic assets declarations, and the system for checking the beneficial owners of companies and adopting the law on the credit register of the National Bank of Ukraine.
“The deadline of the tranche expires in several days and can’t be extended. So if European Commission considers that Ukraine didn’t fulfill the conditions, Ukraine might lose the money,” Mingarelli said on Nov. 22.
The fifth Eastern Partnership Summit in Brussels on Nov. 24 ended with the news that Ukraine would be allocated another 1.8 billion euros from the European Union under the new macro-financial help program in 2018, Ukrainian President Petro Poroshenko told journalists on Nov. 24 in Brussels.
However, this time the EU has required that Ukraine first provide a detailed plan and spending strategy before it is given the money.
