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European Commission says offering 11 bn euros to Ukraine

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European Commission president Jose Manuel Barroso announced Wednesday a massive aid package to Ukraine of "at least 11 billion euros" as the West stepped up plans to help the new government.

"It is a package designed to assist a committed, inclusive and reforms-oriented Ukrainian government," said Barroso on the eve of an EU crisis summit on events in Ukraine.

"The package combined could bring an overall support of at least 11 billion euros ($15 billion) over the next couple of years," the head of the EU executive told a news conference.

He said he would discuss details of the assistance on Thursday with new Prime Minister Arseniy Yatsenyuk, who is to attend the emergency EU summit called to mull a joint response to the crisis in Crimea.

Barroso called on the EU's 28 member states for "further efforts" of assistance, along with those of other financial institutions such as the IMF, the World Bank and "all partners that want to contribute.

The United States this week offered a $1.0-billion loan.

Barroso said the EU package would include 1.6 billion euros in loans under macro-financial assistance, 1.4 billion euros in grants, of which 600 million euros can be disbursed in the next two years, and 3 billion euros from the European Investment Bank from 2014-2016.

The Commission said another 250 million euros would be leveraged to obtain 3.5 billion euros of loans from bankable investment projects.

And the European Bank for Reconstruction and Development (EBRD) is expected to invest 5 billion euros in Ukraine's economy through 2020.

The offer is far above the 610 million euros originally offered to Ukraine under a political association agreement -- the deal spurned last year by ousted president Viktor Yanukovych that triggered three months of protests.

Barroso said the EU remained ready to sign the accord, which would bring "millions of valuable savings" on import duties.

It was also seeking how to help Ukraine reduce its huge energy bill.

Barroso said the European Commission would also create a special donor coordination mechanism which the European Union is ready to host.

The 5 billion euro figure from the EBRD represents an increase from the previous investment plans, which had been scaled back over corruption concerns in Ukraine, and the bank said it could invest even more if economic circumstances permit.

But it cautioned that it was "essential for investor confidence that Ukraine agree a macro-economic stabilisation programme with the International Monetary Fund and that it tackle endemic corruption."

The EBRD has been working over the last year on an anti-corruption initiative with Ukraine.

"If we see an IMF package, if we see signs of an anti-corruption initiative, and if the economic conditions are right, then we could put in more than 5.0 billion euros," EBRD communications director of communications Jonathan Charles told AFP

Charles also said: "There is no change in our investment activities in Russia".

The EBRD was formed in 1991 to help former Soviet bloc countries switch to a market economy, and in 2012 expanded its reach to emerging Arab democracies.



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