Originally published at Euromaidan Press

Since February 2022, despite Russia’s full-scale invasion of Ukraine, our country has made a significant leap towards EU integration. On June 23, 2022, Ukraine was granted candidate status for membership in the European Union. A historic decision to open negotiations for Ukraine’s accession to the EU was made less than two years later, on December 14, 2023. These negotiations officially began in June 2024.

At the same time, the European Commission, together with Ukraine, spent about a year developing a new financial support mechanism for Ukrainians – the Ukraine Facility. The funds from this facility are aimed at reconstruction, recovery, maintaining macroeconomic stability in Ukraine, financing social guarantees, and carrying out comprehensive reforms on the path to Ukraine’s full integration into the EU.

Olivér Várhelyi, Commissioner for Neighbourhood and Enlargement, stated: “With this agreement, the European Union is delivering on its promise to support Ukraine, by providing access to much-needed financing of up to €50 billion over the next four years. The Ukraine Facility will enable support to be tailored to an evolving situation, while conditions tied to the disbursement of funds will keep progress on track. We will continue to play a strong role in Ukraine’s recovery and reconstruction, which must be linked to the implementation of reforms consistent with Ukraine’s European path.”

The Ukraine Facility is a European Union mechanism for planning and providing macroeconomic financial support, as well as a tool for monitoring the implementation of reforms in Ukraine. However, this program is not directly related to the negotiation process for Ukraine’s accession to the European Union.

The conditions for Ukraine’s integration into the EU include the implementation of a series of structural reforms, which often coincide with the conditions for receiving funds from the Ukraine Facility. However, EU accession is a complex and multifaceted process that involves the development of a series of roadmaps for reforms and conducting separate negotiations by clusters (chapters) of EU acquis regarding compliance with EU standards.

While the list of actions and reforms that the Ukrainian government must undertake and implement to receive funding under the Ukraine Facility is already known and outlined in the Ukraine Plan, the list of measures necessary to achieve full EU membership still needs to be developed within the framework of the negotiation process with the EU partners. It is also important to continuously update and modify this list of measures (“roadmaps”) in accordance with the challenges (requirements) of the times, and the adoption of new legislation within the EU.

The Ukraine Facility provides short- and medium-term support to Ukraine from 2024 to 2027 with funding up to €50 billion (an approximate figure that depends on many factors such as the state and timeliness of reform implementation, Ukraine’s budget needs, etc.) across three pillars:

1. Ukraine Plan;
2. Investment Program;
3. Support Program.

Pillar 2 aims to improve the investment climate and attract more investors to Ukraine, while Pillar 3 focuses on technical and accompanying support for Ukraine (measures that directly or indirectly arise from the Ukraine Plan).

Pillar 1, the Ukraine Plan, is they key one as it provides systemic support for reforms in the process of transforming Ukraine to meet the requirements of the European Union and finances Ukraine’s public needs (direct support for the State Budget of Ukraine).

All reforms outlined in the Ukraine Plan are divided into three main blocks: basic reforms, economic reforms, and sectoral development of key areas of the Ukrainian economy.

Basic reforms are fundamental and cross-cutting directions for transforming Ukraine’s public governance system, including through public administration reform, improving management and public finance governance, judicial reform, and combating corruption, including money laundering.

The economic reform block aims to create a transparent, fair, and efficient system for attracting investments, convenient for both entrepreneurs and the state. This includes implementing structural changes in financial markets, managing state assets, improving the business environment, enhancing human capital, and conducting decentralization and regional policy.

Sectoral development in energy, transport, agri-food, and critical minerals for the EU, as well as the development of entrepreneurship, small and medium-sized businesses, processing industries, and environmental protection, is the main goal for the comprehensive development of the national economy and enhancing its global potential. This also serves as a prerequisite for a multiplier effect on related industries.

The Ukraine Plan also includes three cross-cutting directions, with separate measures provided in all sections: the “green” transition, digital transformation, and European integration.

Ultimately, the Ukraine Plan includes 151 quarterly indicators within 69 reform directions, including 16 investment indicators. According to the agreed procedure, Ukraine reports on the fulfillment of these indicators quarterly. If approved by the European Commission, the State Budget of Ukraine receives funds (financing) from the European Union on a quarterly basis.

According to the Ministry of Economy of Ukraine, in 2024 Ukraine is to receive €16 billion, in 2025 – €12.5 billion, in 2026 – €7.25 billion, €1.2 billion in 2027, and €1.32 billion in January 2028 for the fulfillment of Q4 2027 indicators.

Ursula von der Leyen, President of the European Commission, said: “The political agreement on the €50 billion Ukraine Facility is a major step forward. Europe is true to its word. We will continue to deliver much-needed funding and predictability for our brave partner and aspiring member”.

As of now, Ukraine has already received €6 billion in financial support in March and April 2024 for successfully meeting 5 Q1 indicators.

Importantly, in Q2 2024, Ukraine met all 9 indicators, including approving the digitalization plan of the State Customs Service, the Budget Declaration for 2025-2027, appointing a new head of the National Agency for Corruption Prevention (NACP), and adopting updated legislation on the Bureau of Economic Security (BES).

As a result, on July 24, the ambassadors of the European Union countries approved the second quarterly report on the implementation of the Ukraine Plan and confirmed the allocation of the second tranche of financial assistance to Ukraine in the amount of €4.11 billion shortly.

In some cases, Ukraine even exceeds the Ukraine Plan’s timeline. For example, on June 20, 2024, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Public Consultations”, which, according to the Ukraine Plan, was to be approved by January 1, 2025. The RPR Coalition had advocated for this law for about 10 years. Meanwhile, in other indicators, state representatives wait until the deadline for the indicator, as was the case with the legislation on the State Bureau of Investigation, and only after additional reminders from European partners do they make the necessary decisions.

Ultimately, by 2027, in the absence of other unforeseen events, the main financial support mechanism for Ukraine from the European Union will be the Ukraine Facility. Within its framework, Ukraine, in close cooperation with the European Commission, will implement the Ukraine Plan and, to achieve this, will carry out structural reforms in all areas of public life to align with EU standards.

At the same time, Ukraine will conduct negotiations for full membership in the European Union, the success of which will also depend on the effective implementation of the Ukraine Plan under the Ukraine Facility.

Ivan Posylnyi, project manager of the RPR Coalition