Deputy Foreign Minister Yevhen Perebyinis issued a letter to cabinet ministers warning that the European Union may delay the next tranche of 4 billion euros from the EU’s Ukraine Facility until next year if expected aspects of corruption reforms are not completed by the end of the month. The initial payment, scheduled for November, risks delay due to stalled progress in improving regulations for plea agreements in corruption cases. Ukraine’s Criminal Code changes were supposed to be finished by the third quarter of 2024 but were only approved by parliament in the first reading on Oct. 9. It is unclear when the payment will be postponed until if the new changes are not fully adopted.
In response to Russia’s invasion, the European Union outlined a list of reforms that Ukraine must implement as a necessary step toward Kyiv’s accession into the alliance. President Volodymyr Zelensky recently signed a bill reforming the State Customs Service, aiming to tackle corruption and save funds lost to smuggling. The Ukraine Facility, approved by the EU in February, provides 33 billion euros in loans and 17 billion euros in grants to Ukraine. The EU Council approved the framework agreement in May, outlining the government’s tasks for recovery, reconstruction, and modernization. Despite receiving $42.5 billion in external financing last year, Ukraine still requires additional foreign financial support, with Finance Minister Serhii Marchenko estimating the need for $12-15 billion next year.
The legislation on customs reform, signed into law by Zelensky, was pushed through after pressure from Western partners and Ukrainian business associations. This reform is a critical step toward Ukraine’s accession to the EU and aims to improve transparency and efficiency in customs procedures. The EU’s financial support for Ukraine is contingent on the implementation of such reforms, and delays in passing necessary legislation could jeopardize future funding. The ongoing war and economic challenges in Ukraine highlight the importance of structural reforms to strengthen the country’s financial stability and reduce corruption.
The delay in receiving the next tranche of EU funding underscores the urgency of Ukraine’s corruption reform efforts. Failure to meet the EU’s requirements could have significant consequences for the country’s ability to address its financial needs and implement necessary reforms. The government’s commitment to combating corruption and improving governance will be closely watched by international partners, who play a crucial role in supporting Ukraine’s recovery and development. As Ukraine continues to navigate the challenges of conflict and economic instability, securing external financial assistance will be essential in ensuring the country’s long-term stability and prosperity.
Overall, the situation highlights the complexities and challenges facing Ukraine as it seeks to balance the demands of international partners with the need to address internal reforms and economic stability. The EU’s conditionality on financial support underscores the importance of Ukraine’s commitment to anti-corruption measures and structural reforms. As the country works to rebuild and modernize its institutions, the timely implementation of necessary changes will be crucial in securing continued support from the EU and other international donors. Ukraine’s ability to successfully navigate these challenges will have far-reaching implications for its future development and integration into the European community.
