EU releases EU 500M in aid to Ukraine

BRUSSELS, Belgium – The European Union released EU 500 million ($616 million) in loans to Ukraine on Wednesday, December 3, the latest portion of a 1.6 billion ($2 billion) aid program launched in March to rescue an almost bankrupt Kiev government.

The expected payout comes a day after Ukrainian President Petro Poroshenko unveiled a new government tasked with pushing through anti-corruption reforms, a key condition of the EU’s loan program.

“We are providing essential financial support at a time of extraordinary economic and social challenges for the Ukrainian people,” the EU’s Economic Affairs Commissioner Pierre Moscovici said in a statement.

“In turn, it is vital the country maintain the momentum of reform so as to create the conditions for sustainable prosperity for all Ukrainians,” he added.

The EU and international lenders have already provided billions of euros in loans and grants since a revolution overthrew a pro-Russian government in February, sparking a separatist war in the east and a deep economic crisis.

Brussels has however repeatedly postponed plans for a donors’ meeting to help Ukraine’s crippled economy and instead urged Kiev to reduce its reliance on borrowing and handouts.

On a visit to Kiev last week, the EU neighbourhood commissioner Johannes Hahn said the government “needed to deliver” on reforms. 

“There is increasing mutual understanding that we should speak less about the donor’s conference and more about reforms and investments,” he said. 

Ukraine on Tuesday handed foreigners – including a US citizen – top posts in a new reformist government aimed at rooting out endemic corruption.

Poroshenko said that Ukraine had to learn from “foreign experience” as it tries to climb out of bankruptcy that many blame on decades of political gridlock and graft.

The EU still has 250 million euros to pay out from the loan programme. 

The loans are part of a much vaster 11 billion euro programme decided at a summit in March that also includes EU development funds and lending from the European Bank for Reconstruction and Development. – Rappler.com