Ukraine | Economic Issues | EU

European Parliament approves EU loan to Ukraine

Delegation Ukraine EU News

EU plans to lend Ukraine €1.8 billion to help plug its short-term balance of payments gap were approved by MEPs on Wednesday. The EU will borrow the money externally and lend it on to Ukraine with the same interest rate. The disbursement will be tied to Ukraine pledging structural reforms to tackle problems that contributed to the current crisis.

“The result of today’s vote is a strong political message, not only to Ukraine to show that the EU stands firmly by it, but also to those countries which seek to see us divided in helping Ukraine”, said rapporteur Gabrielius Landsbergis (EPP, LT).

MEPs approved the Commission’s proposal, without amending it, by 492 votes to 107 with 13 abstentions.

Ukraine’s cash flow difficulties

Ukraine’s acute economic crisis is rooted in long-standing structural problems, such as corruption, and aggravated by the armed conflict in the east of the country, trade restrictions imposed by Russia and the escalation of a natural gas dispute with it. Ukraine has lost its access to i! nternational debt markets so can no longer borrow money itself.

Where will the money come from?

The European Commission will raise funds on the international bond market and lend them on to Ukraine, at no extra interest beyond what the EU has to pay to its external lenders.

Ukraine would have to return the money within fifteen years of borrowing it.

Reforms in exchange for the loan

Terms for the loan still need to be agreed by the EU and Ukraine in a memorandum of understanding which commits Ukraine to a reform programme designed to remedy the accumulated fundamental weaknesses that helped to cause the current deficit.

The draft deal includes public finance management reforms, anti-corruption measures, tax administration changes; reforms in the energy and financial sectors; and measures to improve the business environment.

Once the EU and Ukraine sign the deal , the mone! y will go straight into Ukraine’s budget. Two thirds of the agreed amount might be disbursed by the end of 2015 and the final tranche in the first quarter of 2016.

Mahboub  |  13-49-2015
Helpful diagram which does its best to eliaxpn the complexities of the new system but it is still incomplete. There are some notable ommissions, for example, where are the pharamcies, opticians, private providers, Clinical Senates, Local Professional Networks, Commissioning Support Services, Local offices of the NCB and PHE, Ambulance services, NHS Choices/NHS Direct?. The colour coding also seems somewhat confusing as Local Authorities [LAs] and PHE (which are coloured purple to indicate their role is to improve public health ) will also commission some services, deliver others and carry out health protection/ emergency prepardness and planning i.e. they will do much more than just improve public health ? I note that Local Authorities are listed twice and given two different roles which is confusing as it doesn\'t give the full picture of their whole role or legal duties (safeguarding, health protection etc)LAs also have a lead role in healh and well-being boards, but the Board is situated elsewhere in the diagram, is disconnected from the Local Authority and only aligned to the CCG/NCB yet the Board\'s key role is to promote integration could your diagram be re-jigged to better reflect that closer integration please?It is good to see that someone is attempting to make sense of the new arrangements though.
Paulo  |  13-36-2015
It would seem, as several have cemeontmd, that there are services missing and there are no real indications as to how the various services link together. The real test is whether the care and effectiveness of health delivery improves, but that will not be known for a year or two at least to give a valid comparison (immediate comparisons will not be valid). What would be interesting is to see an equivalent diagram of where we are now (including ALL the services for both the now and proposed) and see whether we are just increasing complexity, in which case delivering improved service will probably not be realised.
Marilyn  |  14-17-2015
Very pretty and useufl, but incomplete as has been pointed out by other commentators. Can you advise when the missing bodies will be added? especially as to include GP Surgeries and dentists and not pharmacies and opticians is at best disrespectful to those front-line healthcare professionals supporting the NHS and patient care. [url=]gzukpyllper[/url] [link=]fsekblhcl[/link]