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EU/UKRAINE/BOSNIA : EU OFFERS MACRO-FINANCIAL ASSISTANCE TO KIEV AND SARAJEVO.

The European Commission proposed to the Council, on 30 October, to provide macro-financial assistance (MFA) to Bosnia and Herzegovina in the form of a loan of at most 100 million, and to Ukraine with a loan of up to 500 million. In both cases, this MFA loan(1) must supplement the adjustment programmes agreed by the national authorities with the International Monetary Fund (IMF) to attenuate the effects of the economic crisis. The European Parliament must also be consulted on both loans.

The loan to Bosnia would be paid in two instalments, tentatively in the second and fourth quarters of 2010. The assistance is conditional on respect for the adjustment programme agreed with the IMF. Due to economic problems and growing pressure on public finances, Bosnia and Herzegovina has obtained external aid (IMF, EU and other financial institutions) of 1.15 billion.

The loan to Ukraine will also be paid in two instalments and will likewise be conditional on respect for the adjustment programme agreed with the IMF. When Ukraine's economic activity and external situation started to decline, the IMF approved, in November 2008, a stand-by loan programme for the country to the tune of US$16.5 billion. Other international fund donors, including the World Bank and the European Bank for Reconstruction and Development, are also supporting the country's recovery efforts.

The Commission also proposed an MFA loan of 200 million to Serbia, on 8 October.

(1) The MFA loan is an exceptional EU crisis response instrument available to help the Union's neighbours.

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Publication:European Report
Geographic Code:4EXUR
Date:Nov 2, 2009
Words:254
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