The European Commission has approved a 2.9 billion euro payment to Ukraine but is holding back a second, larger tranche of 3.9 billion euros, telling Kyiv that a backlog of unfinished reforms needs to clear parliament before the money can move.
In total, around 20 billion euros in EU assistance is tied to the reform programme, drawn from a 13.5 billion euro support loan and a further 6.45 billion euros available through the Ukraine Facility. The stakes are high on Kyiv's side too, with the country facing a budget shortfall of roughly 32.6 billion dollars for next year. A Commission spokesperson said timely implementation of the outstanding laws is key to letting disbursements proceed as planned, while commissioners Valdis Dombrovskis and Marta Kos wrote to Ukrainian parliament speaker Ruslan Stefanchuk stressing that adopting the legislation promptly is essential to secure the financing that remains available.
A long list, and a parliament in recess
The outstanding items cover a wide range of policy areas, including new rules on insolvency procedures for small and medium sized businesses, a modernised civil service framework, simplified VAT rules, changes to state aid mechanisms, tighter anti money laundering standards, a new disciplinary system for prosecutors, and the removal of a duty free exemption on international parcels. The parcel measure alone has already been rejected twice by lawmakers before finally clearing a first reading, with a further vote still required, while several of the other bills have yet to even be formally submitted to the Verkhovna Rada. Ukraine's parliament remains in recess until mid October, leaving little time to work through the list before the Commission's patience, and the country's own budget math, run out.