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European Commission

[Check Against Delivery]


Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro

Press speaking points by Vice-President Kallas during his visit to Ukraine

Crisis Media Centre

Kyiv, 20 May 2014

Good afternoon.

I had a useful meeting earlier today with Deputy Prime Minister Hroysman and representatives of regional and local authorities, and I am looking forward to meeting later this afternoon with Prime Minister Yatsenyuk and Finance Minister Shlapak.

The key message I have come to convey today is that the European Union is fully committed to helping Ukraine to address its major economic challenges.

In the short-term, our efforts are focused on providing exceptional Macro-Financial Assistance, worth EUR 1.6 billion, in long-term, low-interest loans.

I can confirm that first EUR 100 million of the EU Macro-Financial Assistance has been disbursed to Ukraine today.

We will make a second larger disbursement of EUR 500 million soon. I heard today that the Ukrainian Parliament has completed the ratification of the Memorandum of Understanding and the Loan Agreement.

Provided the agreed reforms are implemented effectively and on schedule, we expect to be able to disburse the whole EUR 1.6 billion during the course of this year.

This Macro-Financial Assistance is designed to help Ukraine cover part of its urgent external financing needs, reducing the economy’s short-term balance of payments and fiscal vulnerabilities.

Similar to the stand-by arrangement that was recently agreed with the IMF, the Macro-Financial Assistance aims to underpin the bold economic stabilisation programme recently launched by the Ukrainian administration.

The objective is to improve transparency and governance practices. The successful implementation of the reforms supported by the EU and IMF programmes is essential for stabilising Ukraine’s economy in the short term – and for creating a favourable business environment that can nurture sustainable and inclusive growth in the long term.

In addition, in the very near future Ukraine will receive a budget support grant from the European Union of EUR 250 million, through the ‘State Building Contract’ which, as a whole, is worth EUR 355 million.

The main objective of this assistance will be to promote good governance practices, more accountability and inclusive socio-economic development.

All this is part of the broader multi-billion financial support package announced by the European Commission in March, which includes substantial additional support – up to EUR 3 billion over three years – through the European Investment Bank.

In the area of trade, the EU has already facilitated entry for Ukrainian exporters to the EU market by temporarily removing customs duties.

And when it comes to energy, the EU is working with the Ukrainian authorities to ensure long-term diversification of supplies and to make sure that the Ukrainian gas transmission system continues to be an essential transit route for gas supplies to Europe.

Before I take your questions, let me leave you with this thought:

We all know that implementing economic reforms is always challenging, and even more so in a situation of political and social unrest.

Yet such reforms are essential to achieving a more prosperous and a fairer society.

Many of the countries that joined the EU in the past decade demonstrate the potential of well-targeted, sound economic policies and structural reforms in times of political transition.

Ukraine’s neighbours, Poland and Slovakia, as well as my own country, Estonia, which were among the first recipients of EU Financial Support in the 1990s, are currently among the fastest growing economies in the EU.

With determined implementation of the agreed reforms, I am convinced that Ukraine can join the family of European nations that are able to offer their citizens a transparent and inclusive society accompanied by sustainable growth and job creation.

The European Union is committed to supporting Ukraine as it embraces that challenge. Thank you.

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