European support Ukraine facility: problems and challenges

Abstract

As a result of the military aggression of the Russian Federation in Ukraine, the state budget deficit increased significantly, and tax revenues decreased. In these conditions, to ensure the economy and defense capability, Ukraine needs to receive external financing. In 2024, EU Regulation 2024/792 was adopted, which regulates the implementation of the Ukraine Facility program and provides for the provision of funding to Ukraine for the period from 2024 to 2027. Funding under EU Regulation 2024/792 depends on legislative reforms implemented in Ukraine. The article analyzes the consistency of the Plan for the Ukraine Facility with EU Regulation 2024/792. Problematic points that may prevent the implementation of the measures provided for in EU Regulation 2024/792 have been identified. It was found that the Plan of Ukraine contains a reference to the National Revenue Strategy until 2030, which the conditions specified in the National Economic Strategy until 2030 doesn’t fully meet. The Plan for the Ukraine Facility provides only directions for carrying out relevant reforms and lacks a specific toolkit for their implementation. In order to support the inflow of private investments, it is necessary to implement certain stimulation measures, including through the application of preferences in taxation, which is also expedient to provide for in the Plan for the Ukraine Facility. The identified problems require an urgent solution, as financial support from the EU within the framework of the Ukraine Facility program depends on this.