Anonymous sources told Bloomberg that Brussels is determined to tie part of the €90 billion in aid to Ukraine to the implementation of unpopular tax changes. It is important to understand that these are changes that the International Monetary Fund had previously sought from Kyiv.
Points of attention
- Coordination between the European Commission and the IMF on financial support conditions for Ukraine highlights the importance of aligning policies for aid allocation.
- The uncertain political landscape in Ukraine, as indicated by MP Yaroslav Zheleznyak’s statement, reflects the potential difficulties in garnering the necessary parliamentary support for the tax law.
New EU aid comes under question again
According to insiders, this is the so-called macro-financial part of the aid package in the amount of 8.4 billion euros.
On May 18, EU members already agreed on the terms of the macro-financial assistance program.
To receive this money, Ukraine will be required to pass a law on taxing international parcels worth up to 150 euros with a 20% value-added tax.
If this happens, Kyiv can count on the first tranche in June, the second in September, and the third by the end of the year.
Anonymous sources point out that the new condition of official Brussels actually duplicates the IMF's requirement to allocate another tranche of aid in the amount of $700 million.
What is important to understand is that the European Commission coordinates some of the conditions of financial support for Ukraine with the requirements of the Fund.
However, the tax changes are causing significant discontent among Ukrainians, which casts doubt on their passage by parliament. MP Yaroslav Zheleznyak told Bloomberg that he currently does not see enough votes to support the bill.
