European Commission announced loan worth 11 billion euro to Ukraine

Mar 12, 2014 19:11 IST

The European Commission announced 11 billion euro package of loans and grants for Ukraine on 12 March 2014. The assistance is aimed at putting the shattered economy of Ukraine back on its feet.

The assistance will be discussed by European Union leaders at a summit in Brussels on 13 March 2014, and requires widespread reforms by the new Ukrainian government and the signing of a deal between Ukraine and the International Monetary Fund.

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The assistance includes 1.6 billion euros in direct loans and 1.4 billion euros in grants, of which 600 million euros can be disbursed over the next two years.

After two years, 3 billion euros will be released from the European Investment Bank between 2014-2016 and the European Bank for Reconstruction and Development totaling 5 billion euros.

Other money will be raised by leveraging funds available from the EU's Neighbourhood Investment Facility, a fund set up to invest in projects in the EU's neighboring states.

The EU will offer trade breaks worth 500 million euro (15.12 billion US dollar) for a year as an immediate symbol of support. EU leaders were ready to sign the political agreement and to bring forward some parts of trade deal especially tariff cuts.

Earlier, on 11 March 2014, the United States also announced worth of 1 billion US dollar as loan to Ukraine and offered technical assistance in some areas.

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