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In Riga, European Commission Vice-President Valdis Dombrovskis, Ukraine's Finance Minister Natalie Jaresko and the Governor of the National Bank of Ukraine Valeria Gontareva signed a Memorandum of Understanding and loan agreement for the third EU Macro-Financial Assistance (MFA) programme toUkraine.

The agreements set out the conditions for Ukraine to benefit from an additional €1.8 billion in EU financing.

The Memorandum of Understanding includes a policy programme drawing from the ambitious reform agenda of the Ukrainian authorities. It covers important economic and structural policy measures in six areas: public finance management; governance and transparency; the business environment; the energy sector; social safety nets; and the financial sector. These reforms aim to facilitate progress on the country's main short-term priorities, outlined in the EU-Ukraine Association Agenda. They also take into account the existing reform commitments of Ukraine under its various programmes with international creditors, in particular the IMF and the World Bank.

Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, said: "Helping Ukraine to achieve peace and transform the country into a modern, stable and prosperous economy is one of the most important tasks Europe faces today. Implementing structural reforms can be difficult, even during good times. I have been encouraged by the commitment and determination of the Ukrainian Government to reform the country, despite the very complicated geopolitical and security context. The EU continues to support Ukraine in its reform efforts. We aim to disburse a first tranche of €600 million as soon as the Memorandum enters into force, following its ratification by the Ukrainian Parliament."

The Commission proposed the third Macro-Financial Assistance (MFA) programme for Ukraine in January. It was adopted by the European Parliament and the EU Council of Ministers on 15 April. The programme makes available up to €1.8 billion in medium-term loans and is intended to assist Ukraine with its critical challenges, such as a weak balance of payments and fiscal situation. It can be implemented in the course of 2015 and in early 2016, provided that the conditions of the Memorandum are met and Ukraine's IMF programme, which includes a debt restructuring component, remains on track. The package is envisaged to be disbursed in three equal tranches of €600 million.

This new Macro-Financial Assistance to Ukraine will be the third MFA programme for Ukraine since 2010. In 2014 and 2015, the Commission disbursed €1.61 billion under two similar MFA programmes. Altogether, they amount to €3.41 billion, which represents the largest financial assistance to a non-EU country in such a short time. It also comes on top of existing EU contributions such as humanitarian aid and technical and project assistance.