EU set to unlock €50 billion in aid following endorsement of Ukraine’s reform plan

On 15 April, the European Commission endorsed Ukraine's comprehensive reform and investment strategy for the next four years and recommended that the EU Council approve Ukraine's reform and investment strategy, a crucial step that will unlock €50 billion in financial assistance for the country. Ursula von der Leyen, the President of the European Commission, stated in her post on X/Twitter that the plan provides a solid foundation for a more modern and prosperous Ukraine on its path towards EU integration. The €50 billion aid package, known as the Ukraine Facility, was initially approved by EU leaders in February 2023. Although Hungarian PM Viktor Orban initially vetoed the package, he did not oppose its passage during the second voting attempt in February. The funds are intended to support Ukraine's reform efforts and its progress toward closer ties with the European Union. According to the program, Ukraine must meet certain conditions to receive the financial aid, and the payments can be suspended if these requirements are not met. The EU Council approved the program on 28 February, allowing it to come into force so that Ukraine could receive the first funds. On 20 March, EU Diplomacy Chief Josep Borrell announced that the European Commission had disbursed the first tranche of €4.5 billion to Ukraine.

The reform plan

The Ukraine Plan, submitted by the Ukrainian government, outlines 69 reforms and 10 investments across 15 key areas, including energy, agriculture, transport, the green and digital transition, and public administration. The reforms aim to enhance Ukraine's macroeconomic and financial resilience, improve governance, increase the capacity and efficiency of the administration, and support the development of the private sector.

According to the Commission's assessment, the Ukraine Plan effectively addresses the objectives of the Ukraine Facility by identifying key reforms and investments that can boost sustainable economic growth and attract investments. The Plan also provides a framework to guide Ukraine's recovery, reconstruction, and modernization efforts.

The adoption of the proposed Council Implementing Decision will enable the Commission to disburse up to €1.89 billion in pre-financing, with regular disbursements tied to the implementation of reform and investment indicators under the Ukraine Plan. The Commission has stated that the implementation of the Plan could increase Ukraine's GDP by 6.2% by 2027 and 14.2% by 2040, while also reducing the country's debt by about 10 percentage points of GDP by 2033.

Read also:

• Borrell to EU: supporting Ukraine cheaper than dealing with its defeat
• FT: US proposes debt to fund Ukraine using profits from Russian assets
• EU Council finalizes €50 billion financial assistance plan for Ukraine