EC: Kiev completes 13 reforms out of 16, Ukraine Facility tranche to be cut
MOSCOW. July 28 (Interfax) - The next, fourth tranche of financial assistance to Ukraine in 2025 under the Ukraine Facility mechanism, which the Ukrainian government requested back in June, will be provided in a smaller amount - 3.05 billion euros instead of 4.5 billion euros, since Ukraine has failed to complete three out of 16 reforms promised to the European Union, Ukrainian media reported, citing European Commission (EC) spokesperson Guillaume Mercier.
Mercier told reporters that Ukraine had submitted a fourth payment request on June 6 for a partial payment of 3.05 billion euros instead of 4.5 billion euros, and the EC had assessed the request and submitted a proposal to the Council of the European Union on June 30.
He said that the fourth tranche was the largest in terms of the amount and scope of reforms that need to be implemented. Mercier noted that if all the indicators were met, Ukraine would receive 4.5 billion euros, with 16 reforms to be implemented.
However, he said that in its request, Ukraine declared the implementation of 13 out of 16 required reforms, as the implementation of the other three was still ongoing. He said that the EC had assessed 13 reforms as completed and proposed that the Council of the EU allocate 3.05 billion euros as the fourth instalment under the Action Plan for Ukraine.
Mercier said that, of the three unfinished reforms, one is the law on the territorial organization of executive power (the so-called decentralization reform), and the other is the law on the ARMA reform. The third unimplemented reform concerns the selection of judges for the High Anti-Corruption Court.
According to the partial payment methodology adopted earlier this year, if a reform is not completed on time, the corresponding amount is suspended for up to 12 months, during which time the reforms can be implemented and the corresponding payments made.
The EC announced two weeks ago that it had determined the size of the fourth regular tranche under the first basic component of the EU Ukraine Facility program - it will amount to 3.05 billion euros, which means another decrease compared to previous tranches.
The payment of the fourth tranche is expected in August.
The first regular tranche under the Ukraine Facility, which Ukraine received last August, amounted to 4.2 billion euros, including a grant of 1.5 billion euros, the second last December - 4.1 billion euros, of which a grant of 1.5 billion euros, and the third in early April this year - 3.5 billion euros, including a grant of 0.4 billion euros.
The Ukrainian Finance Ministry said earlier that in 2025, as part of the Ukraine Facility, there were plans to receive around 12.5 billion euros in financial support for Ukraine, of which 1.5 billion euros in the form of grant support. In the International Monetary Fund (IMF) program updated at the end of June, the financing forecast for this program this year is $12.9 billion.
At the same time, in line with the terms of the Ukraine Facility program, the volume of tranches is tied to Ukraine's fulfillment of key indicators.
In early June of this year, Finance Minister Sergei Marchenko asked parliament members to pass bills in a timely manner as part of Ukraine's commitments to international partners.
"We have already lost 1.2 billion euros in the first quarter. Of this, 500 million euros is grant funds, lost due to bills that were not passed and commitments under the Ukraine Facility that," Marchenko said at the time.
The updated IMF program envisages that under the baseline scenario, in which the crisis ends at the end of this year, Ukraine will need $42.8 billion external financing to cover the deficit this year.
