Ukraine is at risk of losing significant financial support from the European Union – up to €1.5 billion – due to the failure to implement a number of key reforms outlined in the Ukraine Facility program. The relevant commitments were supposed to be fulfilled by the first quarter of 2025.
This is reported by Finway
Which Reforms Were Not Implemented
According to monitoring prepared by the RRR4U consortium of analytical centers, the Ukrainian government has failed to meet three important structural benchmarks. In particular, the staff of the High Anti-Corruption Court was not expanded, the structure of the National Agency for the Detection and Management of Assets (ARMA) was not updated, and the reform of executive power at the regional level was not carried out. Of the 11 points that were to be completed by the end of the second quarter of 2025, only three have been implemented.
Budget Challenges and Prospects for Further Funding
Economist Bohdan Slutskyi from the Center for Economic Strategy pointed out the risks associated with over-reliance on the regularity of ERA loan disbursements. According to the expert, in 2025, the government plans to increase state expenditures by 400 billion UAH, partially covering them through the issuance of domestic government bonds (OVDP) at over 16% per annum.
“The high regularity of ERA loans is not a panacea and is not a reason to undermine the Ukraine Facility,” he emphasized.
Despite the difficulties with reforms, Ukraine has managed to meet all the International Monetary Fund’s requirements regarding the integration of state investments into the budget system. This allows for the expectation of receiving another IMF tranche of $490 million.
At the same time, the deadlines for the implementation of certain reforms, including customs reform, have been officially postponed by the government to the end of the year, indicating the complexity and delays in implementing the necessary changes.