19.06.2015 [News]

EU further supports Ukraine’s reform agenda and its economic recovery

On 18 June 2015, Commissioner Hahn and the Ukrainian Minister of Economy, Mr Abromavicius, signed a financing agreement worth €55 million for the programme EU Support to Ukraine to Re-launch the Economy (EU SURE). With this programme, the EU's grant allocation for this year alone is set to amount to around €200 million and it is a further sign of the unprecedented support made available to a non-EU country in such a short period of time, in a variety of grants and loans. In addition, also today the Verkhovna Rada of Ukraine has ratified the 'Memorandum of Understanding' for the third macro-financial assistance package from the European Union, amounting to €1.8 billion.

'Today's ratification by the Ukrainian Parliament of the Memorandum of Understanding for the new EU macro-financial support is a clear sign of the commitment of Ukraine to its reforms path', said Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue. 'The measures included in the Memorandum, in particular on the fight against corruption and on the reform of its public administration, are key for Ukraine to become a secure and prosperous state, despite the conflict in the East of the country. We are now working towards disbursing the first payment of €600 million in the coming weeks.'

European Neighbourhood Policy and Enlargement Negotiations Commissioner, Johannes Hahn, said: 'I am glad to sign the financing agreement for the 2015 special measure in support of private sector development and economic recovery. This programme will support the development of SMEs across Ukraine and early recovery of those regions most affected by the conflict. The package will help to set up Business Support Centres in 15 regions. We hope this can help launch new businesses and contribute to a new start for people who have had to leave their homes due to the conflict.'

This is part of a wider coordinated effort under the Eastern Partnership to improve access to finance for SMEs and to help them prepare for the Trade part of the Association Agreement aiming at establishing a Deep and Comprehensive Free Trade Area which will be provisionally applied as of 1 January 2016. The recently launched DCFTA Facility should leverage about €1billion for Ukraine to help SMEs seize new trade opportunities, improve access to finance and helping businesses comply with European standards.

During his visit Commissioner Hahn will also be announcing that, in recognition of reform efforts undertaken, Ukraine will receive a substantial additional allocation this year under the Umbrella fund, which means that Ukraine will benefit from at least €200 million this year in grant funding, in line with commitments taken in March of last year.

The Financing Agreement signed yesterdy is part of the first 2015 Special Measure for Private sector Development and Approximation approved by the European Commission on 23 April.

EU Support to Ukraine to Re-launch the Economy - EU SURE (€55 million): The action supports national, regional and local authorities and other stakeholders to develop and implement effective economic development policies, including SMEs policy. One component will be the setting up of Business Support Centres to cover 15 regions, managed by the EBRD for the development of regional capacities and training in entrepreneurial skills in at least 15 regions of Ukraine, in association with local business associations, banks and local/regional authorities; particular emphasis will be put on the areas affected by the conflict to contribute to the recovery. This action will also facilitate Ukraine's participation in Horizon 2020.

The DCFTA Facility for SMEs has been launched at the Eastern Partnership Summit in Riga in May this year. The Facility will provide some €200 million worth of grants from the EU budget over the next 10 years. This contribution is expected to unlock new investments worth at least €2 billion for the SMEs in the three DCFTA countries: Georgia, Republic of Moldova and Ukraine. The financial means for the investments will be largely coming from the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

Source: European Commission