Statement of non-governmental organizations of Ukraine regarding the need for the asap decision on the starting of the Ukraine Facility

The lack of a compromise within the EU regarding the Ukraine Facility and additional funding for the EU’s internal needs endangers the launch of this initiative for Ukraine and the macrofinancial stability of our country against the background of the budget deficit, because the critically needed financial support within the Ukraine Facility may be postponed indefinitely in 2024.

The combination of Ukraine’s allocation of €50 billion with requests for €15 billion in additional funds for migration, €10 billion in strategic technology investments and almost €19 billion in interest payments on joint EU borrowing effectively blocked the negotiation process for the 2021-2027 budget.

The Ukraine Facility program should create a basis for the rapid recovery and development of the Ukrainian economy. It is assumed that most of the funds (75%) will be directed to the state budget to ensure macro-financial stability. The second component of the program (16%) is aimed at creating a special investment instrument to cover risks in priority sectors. This will allow to attract more than 30 billion euros of investments.

To implement this initiative, a comprehensive Plan of Ukraine is being developed – a program of actions and specific reforms for the next 4 years aimed at strengthening the economy, in particular through the development of key sectors, European integration, digitalization and regional development.

In October 2023, the European Parliament supported the European Commission’s proposal for the creation of the Ukraine Facility in the amount of 50 billion euros to support Ukraine during 2024-2027.

In December 2023, a political decision of the European Council is expected, after which the issue will go to the trialogue between the European Parliament, the Council of the EU and the European Commission, after which legally binding normative acts will be adopted.

Despite the unconditional support of Ukraine from the leadership of EU institutions, the vast majority of EU member states and EU financial institutions, Ukraine needs an urgent decision to launch the Ukraine Facility already this year. It is obvious that the formal procedure for its practical implementation may otherwise go far beyond the scope terms of implementation of key needs of Ukraine.

Due to the ongoing Russian aggression against Ukraine, the state budget deficit has reached more than €37 billion. In the conditions of the war, the annual budget expenditures for the Armed Forces of Ukraine amount raised to more than 1.6 trillion UAH, and the revenues to the budget amount to only 1.4 trillion UAH.

Socially important items of the state budget are mainly covered by international aid, and this year Ukraine will need €37 billions of such aid, most of which depends on the decision to establish the Ukraine Facility.

Therefore, we call on all the member states of the European Union, the European Parliament, the European Commission and the Council of the EU to take all necessary measures in order to adopt the decision on Ukraine Facility as soon as possible but avoiding possible linking additional EU expenditures in one package that may postpone adoption initiative of critical importance for Ukraine.

Signed:

1. Ukrainian centre for European policy,
2. Foreign policy Council Ukrainian Prism,
3. European Pravda,
4. Centre for Economic Strategy,
5. DiXi Group,
6. Human Rights Centre ZMINA,
7. Resource and Analysis Centre “Society and Environment”,
8. Anti-corruption Research and Educational Center,
9. World UA,
10.International and EU Sanctions Platform,
11.The Institute for Economic Research and Policy Consulting,
12.Center for Social and Economic Research – CASE Ukraine,
13.Info Sapiens,
14.NGO Ukraine without Waste,
15.Ilko Kucheriv Democratic Initiatives Foundation,
16.PH Capital. Public health experts,
17.Souspilnist Foundation,
18.The Initiative Center to Support Social Action “Ednannia”,
19.Independent media Texty.org.ua,
20.Civil network OPORA,
21.Internews Ukraine,
22.Agency for Legislative Initiatives,
23.StateWatch,
24.ANTS,
25.Centre UA,
26.Centre for Civil Liberties,
27.Anti-Corruption Action Centre,
28.DEJURE Foundation,
29.Detector Media,
30.CHESNO Movement.