EC pays first tranche of new billion euro aid for Ukraine

The European Commission paid on August 1, on behalf of the EU, the first half (500 million euro) of a new one billion euro Macro-Financial Assistance (MFA) operation for Ukraine, the Commission said.

The second tranche will be disbursed on August 2.

“This additional MFA of one billion euro is part of the extraordinary effort by the EU, alongside the international community, to help Ukraine to address its immediate financial needs following the unprovoked and unjustified aggression by Russia.” the Commission said.

The MFA complements the support already provided by the EU, including a 1.2 billion euro emergency MFA loan paid out in the first half of the year.

Taken together, the two strands of the programme bring the total MFA support to Ukraine since the beginning of the war to 2.2 billion euro.

To finance the MFA, the Commission borrows on capital markets on behalf of the EU, in parallel to its other programmes, most notably NextGenerationEU and SURE, the statement said.

The possible borrowing for Ukraine is foreseen in the Commission’s funding plan for the second half of 2022, the Commission said.

In a separate statement, the Commission said that it had on August 1 disbursed 50 million euro in Macro-Financial Assistance (MFA) to Moldova, of which 35 million euro in long-term loans on concessional terms and €15 million in grants.

This is the first disbursement under the new MFA for Moldova, which entered into force on July 18 2022 and is available for two and a half years.

“The unjustified war of aggression of Russia against Ukraine has significantly impacted the Moldovan economy, adding to sizeable pre-existing challenges and imbalances,” the Commission said.

The pandemic had caused a steep recession in Moldova in 2020, while the gas crisis that began in autumn last year exerted additional budgetary pressures, it said.

The Commission said that Moldova, in spite of being among the poorest countries in Europe, had received the highest per-capita number of people fleeing Ukraine.

The ongoing aggression also caused significant trade disruptions, weighing on Moldova’s external position, while surging inflation further undermines the already vulnerable economic outlook.

“The MFA should therefore help Moldova address its urgent financing needs and support overall macroeconomic stability,” the Commission said.

(Photo: EC Audiovisual Service)

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