On the EU assistance for Ukraine to mitigate the effects of COVID-19 crisis and continue reforms necessary to sustain the economic recovery

2020-05-08 | Eastern Partnership

Statement by Mr Andrius KUBILIUS, Co-President of the Euronest Parliamentary Assembly, Member of the European Parliament

Mr Ivan KRULKO, Co-President of the Euronest Parliamentary Assembly, Member of the Verkhovna Rada of Ukraine

The Eastern Partnership region, and Ukraine in particular, belongs to Europe and remains as a geostrategic priority for the European Union. The EU has rapidly taken numerous measures to support the Eastern Partnership countries to fight the COVID-19 pandemic and its social and economic consequences. Overall, the EU is securing in total more than 3 billion euros for the whole EU neighbourhood of which 962 million euros will be allocated for the Eastern Partnership region, including Ukraine.

As the Co-Presidents of the Euronest Parliamentary Assembly, we would like to welcome the support the EU and its international partners are giving on the ground billions of euros of support to assist Ukraine with reforms, halting the spread of the COVID-19 and addressing its social and economic consequences. 

The financial support is directed to provision of medical supplies and equipment, helping Ukrainian infrastructure investments and businesses, including small and medium-sized enterprises, national and regional public institutions as well as civil society organisations. Part of this support is provided as a macro financial assistance, which will contribute to the stability of public finances and to the budget of Ukraine and it has important conditions linked with implementation of structural reforms in Ukraine to increase the economic resilience and growth.

On 13 April 2020, Ukraine has taken important measures and adopted a revised 2020 budget, which provides for a 2.5 billion euros coronavirus fund for immediate measures to counter the spread of COVID-19. However, this budget is not without challenges. Therefore, as the Covid-19 crisis will have a huge impact on Ukraine’s economy, the EU and its international partners must stay vigilant and ready to do whatever it takes to help Ukraine to recover fast from the global pandemics.

In this context, we welcome the first steps taken by the EU to use the macro financial assistance to support ten neighbouring partners in the context of the COVID-19 crisis. Within this envelope, the EU will be adopting for Ukraine a new macro financial programme of 1.2 billion euros as a part a geopolitical package for Eastern Partners, South Neighbourhood and Western Balkan countries to limit the economic fallout of the coronavirus pandemic.

Next to these measures, the IMF agreed to increase the size of its recently negotiated three-year programme for Ukraine, of which around 3.2 billion euros would become available in 2020. Ukraine has also fulfilled the conditions for the remaining EU tranche of 500 million euros under existing macro financial assistance programme, the disbursement of which in 2020 will depend on prior actions with IMF.

In addition to that, the EU has mobilised an emergency support package for the Eastern Partnership region and has allocated for Ukraine more than 190 million euros to address COVID-19 crisis, including its socio-economic impact. The role of International Financial Institutions, such as European Investment Bank, EBRD, WB, KFW and others has become equally important in channelling the investments into Ukrainian economy, especially in supporting SMEs, DCFTA related, innovation or gender equality initiatives with toped-up investments of nearly 120 million euros.

The EU package for Ukraine includes access to grants, loans and knowledge support to help small and medium-sized enterprises and small farms (96 million euros), support to civil society for vulnerable citizens, promotion of grants and a funding for the fight against the disinformation (22 million euros). It aims to strengthen the resilience of Ukraine’s regions (30 million euros) alongside with ongoing COVID-19 related humanitarian support on both sides of the line of contact.

The EU has pledged 22 million euros for the Health Sector and Emergency needs of Ukraine to be used in cooperation with WHO to provide medical devices, testing, gowns and other COVID-19 related equipment. In the eastern part of Ukraine, the EU is supplying sets of personal protective equipment for ambulance teams in Donetsk Oblast, provides a targeted support for businesses, including online stores for micro, small and medium sized enterprises from eastern Ukraine, webinar training for primary care doctors of the health care institutions in Luhansk Oblast. The multi-donor programme U-LEAD is ongoing to support the decentralisation process remotely, with more than 460 remote online-events with over 2600 participants from all oblasts of Ukraine. Moreover, approximately 1.8 million people in 344 municipalities in Ukraine were covered by an information campaign facilitated via EU energy efficiency programme. The EU COVID-19 response is now channelled through civil society to vulnerable families and elderly to help with deliveries of food and medicines in Rivne, Kharkiv, Kyiv, Lviv, Dnipro and other regions. The EUBAM mission will be installing new digital thermometers for instant fever detection to people crossing the border.

Despite many steps have been already taken by the EU and Ukraine itself, we see huge forthcoming challenges in managing of COVID-19 crisis, which will put a strain on public and private sector resources. This will be having a negative social and economic effect on the economy of Ukraine. Many people will be losing their jobs and businesses, so the public institutions will have to use social and economic means to address it, which will bring a huge cost on public finances not only to Ukraine, but also to a whole Eastern Partnership region. 

This will be the EU responsibility to continue supporting Ukraine and the other Eastern Partnership countries having chosen the path of European integration reforms. We should face these challenges together. We should look into a longer-term support by the EU for economic recovery in the region and establish a detailed economic and investment plan. We invite the European Commission to present this plan in the autumn of 2020 in the same manner as it is planning to do for the Western Balkans region.

This EU plan should include investment and European integration reforms support. The implementation of this plan should be in part conditional and use the additional allocations from the EU neighbourhood budget under the new Multiannual Financial Framework of the EU (2021-2027), EU macro financial assistance, loans and guarantees pooled in the investment platform designed by the EU in close cooperation with financial institutions. This plan should have a clear communication strategy and if necessary additional EU staff resources. The plan would be bringing not only a response to the crisis, but also an economic growth perspective to the countries ready to endorse the path of European integration.

Today, the COVID-19 pandemics, followed by the economic crisis is hitting us all as never before. The only way to overcome this huge unexpected challenge is the one of European solidarity. We remain confident the EU is doing a lot now and will be doing even more tomorrow to assist Ukraine and its people. We are in the same family of European solidarity and that makes all of us stronger!