Ukraine’s President Poroshenko signs €1.8bn loan from EU into law

Ukraine's President Petro Poroshenko (Reuters / Valentyn Ogirenko)
President of Ukraine Petro Poroshenko has signed a law ratifying the Memorandum on macro-financial assistance of up to €1.8 billion from the EU to Ukraine as the country desperately tries to save its ailing economy from default.

“The President signed Law on Ratification of the Memorandum on Receiving Macro-Financial Aid from the European Union in the Amount of up to EUR 1.8 billion by Ukraine,” says a statement on the government’s website.

The law was adopted by the Ukrainian parliament on June 18. In May the EU and Ukraine signed a memorandum of understanding on Ukraine receiving the funds as part of a third package of macro-financial assistance.

READ MORE: EU signs new €1.8bn bailout for Ukraine

Ukraine’s Deputy Minister of Finance Artem Shevalev then said that the memorandum envisaged three tranches of €600 million. The interest rate for a period of 10-15 years is projected at 2 percent annually, but will be adjusted according to the results of the European Commission entering the foreign loans market.

President Poroshenko assured the money received by Ukraine won’t be spent on conducting military operations in Donbas.

Ukraine’s economy has been balancing on the brink of collapse since the crisis broke in 2013. The country’s total debt is estimated at around $50 billion, of which $30 billion is external debt and $17 billion is internal. Public sector debt has reached 71 percent of Ukraine’s GDP, and is expected to rise to 94 percent of GDP in 2015, the National Bank of Ukraine said in April.