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Remarks by Executive-Vice President Dombrovskis at the Financing for Ukraine press conference

European Commission

Statement
9 November 2022
Brussels

Good afternoon, ladies and gentlemen

Russia's escalating aggression against Ukraine continues to cause tremendous suffering and damage - to Ukraine and its people above all, but also across the world.

The International Monetary Fund estimates that the Ukrainian economy will contract by 35% in real terms by the end of this year. Inflation is set to reach 30%.

Europe will continue to do all it can to support Ukraine and its people. We have promised this repeatedly from the start of Russia's invasion in February.

Russia's relentless attacks on Ukraine, its cities and infrastructure, are making daily life unbearable. This pressure is constant. And it is being escalated cynically by the Kremlin. Ukraine needs our help.

Since February, the EU, its Member States and European institutions have provided €19.7 billion to support Ukraine's economic, social and financial resilience.

Military assistance comes on top of that amount.

We expect the next payment of €2.5 billion of macro-financial assistance to reach Kyiv by the end of this month.

However, for the future, Ukraine has made it clear that our assistance should be as stable and predictable as possible.

So today, we are proposing to create a new instrument called Macro-Financial Assistance Plus to channel the EU's financing to Ukraine. MFA+ would consist of long-term loans on highly favourable terms of up to €18 billion.

They would have a grace period of ten years, with maximum maturity running up to 35 years.

Interest-related costs would be covered by EU Member States.

This marks a departure from the EU's "classical" Macro-Financial Assistance.

We are presenting a tailor-made package that reflects the acute needs that Ukraine faces - everything from paying people's salaries and pensions, to repairing energy, water and other infrastructure - also social infrastructure like healthcare facilities and housing that Russia has destroyed.

Since the MFA+ will require backing by the EU budget, we envisage making very targeted changes to the MFF and the financial regulation. Johannes will explain this more.

This new aid will allow the EU to cover Ukraine's short-term financing needs.

And it needs to be decided quickly - 2023 is approaching fast and Ukraine's financing needs are urgent.

So we will be working to secure approval from the European Parliament and Council before the end of the year and we are aiming for the first disbursement in January.

Our support will be linked with sectoral and institutional reforms, especially those relating to the fight against fraud and corruption and to strengthening the rule of law.

In parallel, we are working for Ukraine's long-term reconstruction plans, in line with the outcome of the recent Berlin conference and with a view to supporting Ukraine on its path towards European integration.

However, we need to remember that Ukraine is a country at war. So we need to be realistic and flexible, focusing on what is most relevant and feasible to achieve.

Thank you and I now pass the floor to Johannes.