OREANDA-NEWS. February 25, within the EU-Ukraine Summit, Minister of Finance Yuriy Kolobov signed a Memorandum of Understanding and Loan Agreement for EU Macro-Financial Assistance to Ukraine of credit resources of up to EUR 610 million to support the stability of the country’s finance and economy.

The Assistance will be provided in four tranches of EUR 100, 10, 250 and 250 million. The repayment period is 15 years. Interest rate will be assessed when the European Commission having the highest (AAA) rating enters the external market of borrowings to obtain proceeds to be transferred to Ukraine at the same interest rate. The borrowing’s interest rate is expected to be at EUribor + 2% (approximately 3.25% per annum).

The first tranche of the Assistance will be provided when Verkhovna Rada of Ukraine ratifies the Memorandum of Understanding and Loan Agreement. Subsequent tranches will be provided based on the Ukrainian Government’s compliance with the Memorandum criteria including those for: (i) public finance management; (ii) trade, (iii) energy; and implementing (iv) tax policy; and (v) financial sector policy.

Involving EU’s macro-financial assistance is urgent primarily due to an acceptable interest rate for borrowing credit resources. Also, involving European Commission’s credit resources reflects the stability of Ukraine’s fiscal system and is a signal for potential investors. Another important side of the above Assistance is that it will intensify Ukraine – EU financial cooperation.