EU and Ukraine drawing up plans for a Marshall Plan

EU and Ukraine drawing up plans for a Marshall Plan
By Sergei Kuznetsov in Kyiv November 28, 2017

Ukrainian President Petro Poroshenko has agreed with the European Union (EU)'s officials that the block will consider "a Marshall Plan for Ukraine - concentration of all the resources of the EU in a single document, construction of a road map", Poroshenko's media office said in a statement on November 24.

According to the statement, the issue was discussed during the Eastern Partnership Summit on November 24. The summit took place three weeks after the ambassadors of the EU countries, the US, Canada and Japan presented in Vilnius, Lithuania the so-called Marshall Plan for Ukraine. According to the document Kyiv could obtain $5bn per year in the medium term (2018-2020), according to Lithuanian media.

Meanwhile, Poroshenko added that Kyiv agreed with the European Commission that the latter will release a communiqué on "a very ambitious" macro-financial assistance project for 2018-2019.

The president added that there were intense negotiations. "And in the end they yielded this result," Poroshenko's media office quoted him as saying. "To date, this is a motivation for Ukraine to continue reforms. This is the meaning of macro-financial assistance."

His statement comes as the Ukrainian government looks like to miss the requirements for the third loan tranche of the current EU lending programme.

EU Ambassador to Ukraine Hugh Mingarelli warned that Ukraine stands to lose its chance to secure the last €600mn tranche from the EU under the current programme. According to Kyiv-based brokerage Concorde Capital, Mingarelli mentioned that Ukraine still has to complete four requirements to get next wire, including ending a moratorium on timber exports; launching automatic reviews of e-asset and income declarations; adopting a law creating a credit register; launching an electronic system that identifies the beneficiary owners of companies.

"It's positive for the Ukrainian government to have an opportunity to secure more loans, but it has yet to demonstrate a consistent ability to make the most of these opportunities," Concorde's Alexander Paraschiy wrote in a research note on November 27. "Moreover, it's very likely the new programme will contain even more ambitious requirements. Accomplishing even one tranche will be enough to be considered a success for the Ukrainian government, especially since painful reforms are difficult on the eve of an election year."