Ukraine receives €1.5 billion from the EU for the eighth time: what is the program and where does the money go
On September 22, Ukraine received another €1.5 billion in budgetary aid from the European Union (EU). The funds are part of an 18-billion-euro package and have already been transferred to Ukraine's accounts. These funds can be used to cover the budget gap and ensure the operation of social infrastructure and reforms, but not for military needs.
The transfer of funds was announced by the President of the European Commission (EC) Ursula von der Leyen. "We have disbursed another €1.5 billion to Ukraine. This year alone, we have provided €13.5 billion to help Ukraine keep hospitals, schools and other institutions running. This also helps Ukraine on its path to the EU by supporting transformative reforms. Europe remains firmly on Ukraine's side," the EC President wrote on Twitter.
This is the eighth tranche of the EU's macro-financial assistance to Ukraine for 2023. Ukraine received the seventh tranche on August 22, the sixth on July 25, the fifth on June 22, the fourth on May 23, and the third on April 25. The first two were transferred at the same time, in early 2023.
"On September 22, Ukraine received the eighth tranche of EUR 1.5 billion as part of a large-scale macro-financial assistance (MFA) from the EU for 2023... The MFA is provided on unprecedentedly favorable terms and is aimed at financing the priority expenditures of the state budget of Ukraine," the Ministry of Finance of Ukraine said.
The Ministry reminded that there are three more tranches left in 2023. Their provision is expected "taking into account the level of Ukraine's implementation of the structural policy conditions agreed by the parties," the Ministry of Finance emphasized.
What are the conditions for EU assistance to Ukraine
Earlier, von der Leyen reminded that, in addition to monetary support, European funds contribute to reforms in Ukraine. In particular, it is about "good governance," she said.
The funds have been allocated as part of a record-breaking €18 billion aid package. It was approved for 2023. Thus, Ukraine is projected to receive €1.5 billion a month from Europe.
Ukraine cannot spend this money at its own discretion, in particular, it cannot be allocated to finance the Armed Forces. The funds must be spent
- urgent budgetary expenditures (non-military), including pension payments;
- restoration of critical infrastructure;
- initial support for post-war reconstruction.
The entire €18 billion is a series of long-term loans with a high discount. The repayment period is up to 35 years, starting in 2033. It is assumed that the EU countries will cover the interest on the loans instead of Ukraine.
As reported by OBOZREVATEL, the first tranche of EU assistance under this package in 2023 amounted to €3 billion. Thus, Ukraine immediately received support for two months - January and February. So far, a portion has been disbursed for March 2023.