On 20 March, Prime Minister of Ukraine Denys Shmyhal officially submitted a Plan for the Ukraine Facility to President of the European Commission Ursula von der Leyen during a meeting in Brussels. Earlier this week, the Plan was approved by the Government of Ukraine. This is a specific list of structural reforms and measures that will contribute to the sustainable development of Ukraine’s economy, the green transition, digital transformation, and European integration.

In addition, the Plan is a tool for Ukraine to receive financial assistance in 2024-2027. Budgetary support under the Ukraine Facility will be provided based on the results of the implementation of the quarterly indicators of the Plan. Prior to making quarterly disbursements, the European Commission will review the performance of the indicators set out in the Plan and that there are no changes to the reforms already implemented.

The Plan was developed in accordance with EU standards and requirements in constant consultation with the European Commission. A large part of the envisaged reforms is consistent with other support programs of the IMF and the World Bank, as well as with European integration measures, etc.

The Ministry of Finance of Ukraine is responsible for three areas of the Plan: public finance management, anti-money laundering and financial markets. The Ministry of Finance is also a co-implementer in the sections on state asset management, human capital, business environment, decentralization and regional policy, transport, agri-food sector, and critical materials management.

Reforming the public finance management system is aimed at improving the management of revenues, public finances, public debt, public investments, and the audit and financial control system. Reforms in this area are defined by three comprehensive strategic documents: The Public Finance Management Reform Strategy for 2022-2025, the National Revenue Strategy until 2030; and the Medium-Term Public Debt Management Strategy for 2024-2026. All measures are aimed at improving the macroeconomic and financial stability of Ukraine, ensuring the efficient use of public funds, approximation to the EU standards, and promoting sustainable growth.

In the area of anti-money laundering, with regard to the responsibility of the Ministry of Finance, efforts will be focused on bringing Ukrainian legislation in line with EU legislation and FATF standards, including targeted financial sanctions and financial investigations. In particular, the reforms include the creation of a unified bank account register, which will significantly improve the process of preventing and combating money laundering and terrorist financing.

In the area of financial sector reform, the Ministry of Finance will work to implement comprehensive measures to reduce the state share in the banking sector. The key step will be the approval of the new Strategy of State-Owned Banks, after which strategies will be developed for each state-owned bank separately. Also, the Ministry of Finance, in cooperation with other institutions, is responsible for developing steps to solve the problem of non-performing loans.

The Plan will come into force after its approval by the European Commission.