EU greenlights $55 billion reform package for Ukraine, eyes membership path
European Union member states approved Ukraine's plan on Wednesday. Kyiv commits to implementing 69 reforms. Thus, the approval of this plan paves the way for Ukraine to receive support, which is to amount to CAD 55 billion by 2027.
8 May 2024 17:13
On February 1, the leaders of the member states unanimously accepted the so-called Plan for Ukraine. This instrument is intended to guarantee the country about CAD 55 billion for modernization, maintaining the continuity of the state and its development over the next few years. Thanks to this money, Kyiv will carry out the necessary reforms, putting it on the highway towards membership in the European Union.
CAD 18.7 billion will be non-repayable support, while CAD 36.3 billion will be given to Ukraine through low-interest loans guaranteed by EU countries.
$55 billion CAD for Ukraine. EU approves reform package
Ukraine was to receive this money provided that its government presented a plan, which was then approved by the member states. The plan imposed Kyiv's obligations to carry out specific reforms and outlined the country’s reconstruction and modernization path.
The plan was approved by the ambassadors of the member states on Wednesday. Now, their governments must formally accept it within the framework of the European Council.
The money will flow to Kyiv according to a quarterly schedule. Payments will depend on the Ukrainian government's fulfilment of commitments specified in the plan.
Ukraine committed to reforming the country
The Ukrainian authorities committed to carrying out 69 reforms and 10 investments (similar to so-called milestones, the implementation of which is the basis for tranche payments from National Recovery Plans for member states). Changes will cover 15 areas: energy, agriculture, transport, ecological transformation, digital, state enterprises, and public finance.
The plan aims to accelerate the state's decentralization and increase the efficiency of administration and the judiciary. The reforms are intended to support the development of the private sector and create an environment conducive to sustainable economic growth. Its implementation will speed up Ukraine's integration as it strives to become a member state.
On Wednesday, the head of EU diplomacy, Josep Borrell, noted on the X service another massive attack conducted by Russia on Ukraine's civil infrastructure. As he stated, it should be added to the long list of Russian war crimes. He also noted that Ukraine urgently needs air defence systems. Therefore, it will be the subject of the next meeting of defence ministers of the member states.
The Plan for Ukraine worth $55 billion CAD
The support instrument for Ukraine was included in the multiannual financial framework (in fact, the EU budget). At the end of February, the European Parliament agreed to this step with a vote of 536 to 40.
This finalizes decisions that had previously been made at the political level. In December 2023, despite the opening of EU accession talks with Ukraine, Prime Minister of Hungary Viktor Orbán blocked the financial aid to her and the budget review. Therefore, the President of the European Council decided to call a special EU summit in Brussels on February 1, hoping that an agreement with Hungary's Prime Minister could finally be reached.
– We were afraid that the European money, which the European Commission has not given us so far, would sooner or later end up in Ukraine – explained the head of the Hungarian government at the beginning of February. – We were also worried that we were giving funds to Ukraine's disposal for too long and without control – he added.
Viktor Orbán also stated that after lengthy negotiations, Budapest received a satisfying offer and decided to accept it. – I am glad that the market and business community's reaction to this agreement is already positive – he summed up.
