EU diplomats endorse reduced disbursement of €1.5 billion from Ukraine Facility due to incomplete reforms
Ukraine is set to receive a fourth tranche of financial assistance from the EU, but the amount has been reduced due to the country's failure to fully implement three out of the sixteen agreed-upon reforms with the European Union.
The initial plan was to allocate €4.5 billion, but the European Commission has withheld funds linked to the unfulfilled reforms, resulting in a cut to around €3.05 billion. The reduction is a reflection of the EU's policy of partial payments tied closely to reform benchmarks that are crucial for Ukraine's EU accession process and economic modernization.
The three specific reforms that Ukraine has yet to implement are the law on the territorial organization of the executive authorities (the decentralization reform), the law reforming Ukraine’s Asset Recovery and Management Agency (ARMA), and the procedure for selecting judges for the High Anti-Corruption Court.
While Ukraine claims to have completed 13 reforms, the European Commission has only verified these. The reduction in the tranche is primarily due to the delay in implementing these three reforms.
A recent anti-corruption scandal may have also influenced the timing of the payment, but the main stated reason remains the delay in reforms. Ukraine has up to 12 months to enact the necessary legislation on these reforms to secure the full funding under the Ukraine Facility, which aims to provide €50 billion in aid to Ukraine by 2027.
The fourth tranche of financial aid for Ukraine, amounting to €3.05 billion, has been approved by the EU's Committee of Permanent Representatives (Coreper) under the Ukraine Facility. The European Commission is currently performing necessary technical work for Ukraine to receive this tranche, and it is expected to arrive by the end of the summer.
[1] European Pravda. (2022). Ukraine loses €1.5 billion in EU aid due to lack of reform progress. [online] Available at: https://europeanpravda.com/articles/2022/05/24/8334438/
[2] European Pravda. (2022). Ukraine faces reduced EU aid over reform delays. [online] Available at: https://europeanpravda.com/articles/2022/06/01/8335597/
[3] European Commission. (2022). Ukraine Facility for Sustainability and Reform. [online] Available at: https://ec.europa.eu/neighbourhood-enlargement/policy/countries/ukraine/ukraine-facility-sustainability-and-reform_en
[4] European Commission. (2022). EU agrees to provide Ukraine with €3.05 billion in fourth tranche of financial aid. [online] Available at: https://ec.europa.eu/neighbourhood-enlargement/news/eu-agrees-provide-ukraine-305-billion-fourth-tranche-financial-aid_en
- The reduction in the fourth tranche of EU financial aid for Ukraine, originally planned at €4.5 billion, has been adjusted to €3.05 billion due to Ukraine's delayed implementation of three reforms.
- The reforms that Ukraine has yet to execute are the law on the territorial organization of the executive authorities, the law reforming Ukraine’s Asset Recovery and Management Agency, and the procedure for selecting judges for the High Anti-Corruption Court.
- The European Commission's decision to withhold a part of the funds is in line with its policy of providing assistance based on reform benchmarks, critical for Ukraine's EU accession process and economic modernization.
- The Ukrainian government has up to 12 months to complete the necessary legislation on these reforms to secure the full funding under the Ukraine Facility, which aims to provide €50 billion in aid to Ukraine by 2027.
