Baltic States – CIS, EU – Baltic States, Financial Services, Legislation, Ukraine

The EU will borrow the money externally and lend it on to Ukraine with the same interest rate. The disbursement will be tied to Ukraine pledging structural reforms to tackle problems that contributed to the current crisis, the press release of the European Parliament reads.

"The result of today's (March 25) vote is a strong political message, not only to Ukraine to show that the EU stands firmly by it, but also to those countries which seek to see us divided in helping Ukraine," said rapporteur, Lithuanian MEP Gabrielius Landsbergis (European People's Party).

MEPs approved the Commission's proposal, without amending it, by 492 votes to 107 with 13 abstentions.

Terms for the loan still need to be agreed by the EU and Ukraine in a memorandum of understanding which commits Ukraine to a reform program designed to remedy the accumulated fundamental weaknesses that helped to cause the current deficit.

The draft deal includes public finance management reforms, anti-corruption measures, tax administration changes; reforms in the energy and financial sectors; and measures to improve the business environment.

Once the EU and Ukraine sign the deal, the money will go straight into Ukraine's budget. Two thirds of the agreed amount might be disbursed by the end of 2015 and the final tranche in the first quarter of 2016.