Decision 2014/215 - Macro-financial assistance to Ukraine - Main contents

EN

Official Journal of the European Union

L 111/85

Relations between the European Union and Ukraine are developing within the framework of the European Neighbourhood Policy (ENP) and the Eastern Partnership. The Partnership and Cooperation Agreement between the Union and Ukraine entered into force on 1 March 1998. Bilateral political dialogue and economic cooperation have been further developed within the framework of the EU-Ukraine Association Agenda adopted on 23 November 2009. An Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Ukraine, of the other part (‘the Association Agreement’), including a Deep and Comprehensive Free Trade Area (DCFTA), was negotiated from 2007 to 2011 and was initialled in 2012. On 21 November 2013, the Cabinet of Ministers of Ukraine decided to suspend the signing of the Association Agreement. However, since the resignation of the Ukrainian government in February 2014, the current Ukrainian government has declared its willingness to sign the Association Agreement in the near future. On 6 March 2014, the European Council declared in its Statement on Ukraine its commitment to sign very shortly all political chapters of the Association Agreement, and to unilaterally adopt measures allowing Ukraine to benefit substantially from the DCFTA.

The proposal for a Regulation of the European Parliament and of the Council to that effect was adopted by the Commission on 11 March 2014.

The current political crisis has very damaging effects on Ukraine's already precarious economic and financial stability. Ukraine is facing a very weak and rapidly worsening balance-of-payments and fiscal situation, with the economy moving into recession again. The de facto interruption of Russia's assistance under its USD 15 billion package, and the announced end to the reduced gas prices previously granted by the company Gazprom from April 2014 will cause the situation to deteriorate even further. In such circumstances, Ukraine faces a serious risk of default in the near future.

Following the resignation of the previous government, a new interim President and a new government were appointed by the Ukrainian Parliament on 22 and 27 February 2014 respectively. Even though the Ukrainian Constitution of 2004 was reinstated and presidential elections were announced for 25 May 2014, Ukraine could not return to political stability, since its sovereignty and territorial integrity have recently been violated by the Russian Federation.

In this context, Ukraine requires urgent financial assistance by international creditors and donors. If the decision to provide such financial assistance was to be adopted by the European Parliament and by the Council in accordance with Article 212 of the Treaty on the Functioning of the European Union (TFEU) under the ordinary legislative procedure, the rapid disbursement of the Union's macro-financial assistance to Ukraine (‘the Union's macro-financial assistance’) in the first half of 2014 would not be possible, and would thus not address the urgent financial needs of Ukraine. It is, therefore, justified to provide the Union's macro-financial assistance on the basis of a Council Decision adopted pursuant to Article 213 TFEU.

The urgency of the assistance is related to Ukraine's immediate need for funds, in addition to those which will be provided by other international financial institutions and other bilateral donors and to...