The European Union is ready to give Ukraine 11 billion euros ($15 billion) in loans and grants over the coming years to help stabilize its economy, the head of the bloc's executive arm said Wednesday.
The Associated Press
BRUSSELS — The European Union is ready to give Ukraine 11 billion euros ($15 billion) in loans and grants over the coming years to help stabilize its economy, the head of the bloc's executive arm said Wednesday.
The aid comes on top of $1 billion in energy subsidies the United States pledged Tuesday. It will help support Kiev while it negotiates a broad bailout program with the International Monetary Fund.
The EU package is "designed to assist a committed, inclusive and reforms-oriented government in rebuilding a stable and prosperous future for Ukraine," Commission President Jose Manuel Barroso said.
The aid will include 1.6 billion euros in loans and 1.4 billion euros in grants from the EU budget and at least 8 billion euros fresh credit from financial institutions run by or controlled by the EU and its member states, the European Investment Bank and the European Bank for Reconstruction and Development.
The package foresees helping to modernize Ukraine's gas transit system and providing technical assistance ranging from judicial reform to assistance in preparing elections, the Commission said. The package also calls for steps to accelerate achieving visa-free travel for Ukrainians to the 28-nation bloc.
That measure, if approved, would go down particularly badly in Moscow, since Russia has sought visa-free travel to Europe for its citizen for years. Suspending discussions on that project are among the measures EU leaders will consider at an emergency meeting Thursday to punish Russia over its occupation of Ukraine's Crimean Peninsula.
Coincidentally, the headline figure of $15 billion for the EU's aid package is the same amount that Russia was prepared to grant Ukraine in loans until the government of President Viktor Yanukovych was ousted last month.
Yanukovych took the Russian loans instead of a wide-ranging trade and economic agreement with the EU, a move that fuelled the protests that led to his ouster.
Barroso said that agreement was still on the table, and the EU is prepared to provisionally grant Ukraine the benefits deriving from it before a full ratification. Ukraine's industrial and agricultural exporters could save some 900 million euros annually through reduced tariffs, the Commission said.
"The situation in Ukraine is a test of our capability and resolve to stabilize our neighborhood and to provide new opportunities for many, not just a few," Barroso told reporters in Brussels. "We need to be up to this challenge."
The timeline over which the EU funds and loans would be disbursed varied from a few hundred million euros this year to multi-billions between now and 2020. The details were left vague because the situation in Ukraine is still uncertain and negotiations between Kiev and the IMF are ongoing, EU officials said.
Most disbursements will likely hinge on the formation of a new Ukrainian government after elections in May and an agreement on wide-ranging reforms with the IMF. The fund will likely insist, among other things, on a currency devaluation and a sharp hike to natural gas prices, which Ukraine subsidizes heavily.
Ukraine estimates it needs $35 billion in international rescue loans over the next two years.
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