The result of our negotiations was the documents we signed – not just an action plan to liberalize the visa regime, but those that will support dialog in creating a positive business climate, partnership in the energy sector and a number of other issues.
It’s a little early for global conclusions, though. But the conclusion we can make already, is that we have been rather successful in finding an understanding on many key issues between Ukraine and the EU.
The statements made by politicians on both sides bear witness to that.
Positive assessments were given by President Viktor Yanukovych, President of the European Commission José Manuel Barroso, European Commissioner for Enlargement and European Neighbourhood Policy Stefan Fuele, as well as European members of parliament of various political strides.
Many Ukrainian and foreign business press, as well as experts, also gave positive marks.
One of the most telling and important testimonies of progress in bilateral cooperation was, of course, the signing of a credit agreement between Ukraine and EU, which outlines conditions for macro-financial assistance from the European Union.
We’re talking 610 million euros that the Europeans will offer to support the stability of the national macroeconomic system.
In his speech, Barroso noted that this is the biggest macroeconomic financial assistance ever offered by the European Union, which undoubtedly shows how serious our European partners are about Ukraine.
The credit line is for 15 years. It is expected that the aid will come in four installments: one for 100 million euros, the second for 10 million euros, and the last two installments are worth 250 million euros each. Moreover, the loan’s conditions are very favorable.
The actual interest rate will be set after the European Commission, which currently boasts the highest possible credit rating of AAA, taps the external market to get the money that will then be transferred to Ukraine.
The interest rate of borrowing is expected to be about 2 percent over EUribor, which translates into a rate of 3.25 percent.
Of course, there are a number of conditions for receiving the EU credit. The first one is ratification by the Ukrainian parliament of the memorandum and the credit agreement. Secondly, reach an understanding between Ukraine and the International Monetary Fund.
The installments that follow will be dispersed based on how the Ukrainian government fulfills the set criteria laid out in the memorandum on managing state finances, trade, the energy sector and implementation of tax policies in the financial sector.
This financial assistance from the EU is attractive for Ukraine not just because of its interest rate. The loan’s size is an indicator of stability within the financial and budgetary systems of Ukraine and a signal for potential investors.
Furthermore, the receipt of this aid means a deepening of financial cooperation between our country and the EU.
Yuriy Kolobov is the Minister of Finance of Ukraine.
