After a grand proposal made by George Soros to assist Ukraine, the fulfillment of wishful thinking, the European Commission has announced its intentions to pledge about $2.13 billion (€1.8 billion) over the next year.
The European Commission announced on Thursday that it is ready to further assist Ukraine, which has been hit hard by a deep recession. The macro-financial assistance (MFA) to Ukraine could be in the form of medium-term loans. The loan has to be ratified by the European Parliament and the Council of Ministers of the EU.
European Commission President. Jean-Claude Juncker. said, “Ukraine is not alone. Europe stands united behind Ukraine and the reform agenda of the new government. Our actions speak louder than our words. The European Union has provided unprecedented financial support and today’s proposal proves that we are ready to continue providing that support.”
“We want to help the Ukrainian government to put its reform agenda into practice and trigger real change for the country and its people,” he added.
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As with any crisis loan, the disbursement comes with conditions – continuation of Ukraine’s IMF program and the implementation of economic and financial policies under a Memorandum of Understanding between the EU and the government of Ukraine.
The European Commission has already disbursed €1.36 billion in support of Ukraine under existing programs. With another tranche of €250 million pending disbursement after Ukraine agrees to implement policy measures on track with its IMF program.
Some of the requirements include spending reductions and a revamp of the country’s banking sector and its legal system.
Yesterday, an IMF delegation commenced a visit to Ukraine to discuss the next measures, which the government will need to implement in order to secure several billion dollars from the existing $17 billion loan package. The discussions could also include a revamp of the program, as many analysts have expressed that the current program is insufficient.
The plan proposed by billionaire investor and philanthropist George Soros calls for a $50 billion pledge by a number of different European Union funding vehicles and institutions. However, it comes with a heavy load of political hurdles which are very unlikely to be overcome at the current juncture.