Ukraine appeals to EU for urgent financial aid

Ukrainian Prime Minister Arseniy Yatsenyuk. Washington, March 2013, [ Atlantic Council/flickr]

Ukrainian Prime Minister Arseny Yatseniuk appealed to the European Union for urgent financial aid yesterday (15 December), saying the government was doing all it could to fix a shattered economy but needed help.

A year of revolution and war with pro-Russian separatists has pushed Ukraine’s hryvnia currency to record lows and crippled the economy, which was already near bankruptcy after years of corruption and economic mismanagement.

Asked when Ukraine needed new financial assistance, Yatseniuk told reporters in Brussels: “Let me put it in a nutshell – yesterday.” The EU, which last year offered a $15 billion (€12 billion) package of loans and grants to Ukraine, is demanding far-reaching economic reforms in return.

Brussels has refused to organise a donors’ conference to help Ukraine until Kyiv produces a detailed blueprint for the country’s economic development.

Yatseniuk said Ukraine was doing all it could.

Ukraine has lost 20% of its economy due to Russia’s annexation of Crimea and the pro-Russian separatist uprising in the east, the Ukrainian currency has fallen sharply, and yet the government has raised more money in taxes, he said.

“We will do everything that was promised … but to overcome this period Ukraine needs to get some kind of cushion and this cushion is a new package of financial aid,” he said after talks with EU officials in Brussels.

“It is difficult for us to fight with a nuclear state which is armed to the teeth,” he added, alluding to Russia.

EU Enlargement Commissioner Johannes Hahn said the EU would continue to provide “an unprecedented level of financial support” to Ukraine but this hinged on reforms.

Hahn said the EU and Ukraine had agreed on a “road map” of reforms, which was a precondition for organising the donors’ conference, but still needed to work out the details of deadlines and milestones for specific steps. However, he expected the conference to be held early next year.

Speaking alongside Hahn, EU foreign policy chief Federica Mogherini said the EU could adopt new restrictions on European investment in Crimea in time for an EU summit starting on Thursday.

President Petro Poroshenko held out the prospect last month that Ukraine could hold a referendum in several years’ time on joining NATO, drawing a warning from Moscow that this would increase regional tensions.

Speaking at NATO headquarters, where he held talks with Secretary-General Jens Stoltenberg, Yatseniuk said he personally would be happy to join NATO as quickly as possible but he was not sure all NATO allies would be happy with this.

The crisis in Ukraine erupted after its former President Viktor Yanukovich cancelled plans to sign trade and political pacts with the EU in November 2013 and instead sought closer ties with Russia, triggering protests that turned bloody and drove him from power.

Moscow annexed Crimea in March following a referendum staged after Russian forces established control over the Black Sea peninsula in the biggest East-West crisis since the Cold War.

Pro-Russian militants control buildings in more than ten towns in eastern Ukraine after launching their uprising on 6 April. On 11 May pro-Moscow rebels declared a resounding victory in a referendum in Donetsk and Luhansk, which the West called illegal and illegitimate.

The fighting has escalated sharply after Ukrainian President Petro Poroshenko ordered on 1 July an assault on separatists. The EU's resolve to punish Russia strengthened after the downing in Ukraine on 17 July of a Malaysia Airlines passenger plane, killing all 298 people on board. 194 of the passengers were from the Netherlands.

Western leaders say pro-Russian rebels almost certainly shot the airliner down by mistake with a Russian-supplied surface-to-air missile. Moscow has blamed Kyiv for the tragedy.

On 27 August NATO and the U.S. said Russian incursions into Ukraine took an ‘overt and obvious form’ and on 28 August Poroshenko said Russia had invaded Ukraine.

>> Read: Poroshenko says Russia invaded Ukraine

A truce was agreed on 5 September, but the situation has remained volatile.

  • 18-19 December: EU summit could adopt new restrictions on Crimea

Subscribe to our newsletters