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EU Releases 600 Million Euros In Aid To Shore Up Shaky Ukraine Economy

Ukrainian Prime Minister Volodymyr Hroysman (left) and European Commission President Jean-Claude Juncker in February

The European Commission has agreed to send Ukraine 600 million euros to shore up its deteriorating economy, ending months of delays over conditions linked to the loan.

With Ukraine in a third year of war, the European Union softened demands that Kyiv first lift a ban on Ukrainian wood exports, saying the money could now be sent because the government had submitted a bill to change that policy.

"Ukraine has done a remarkable job of stabilizing and reforming its economy, despite the armed conflict unfolding on its soil," Commission Vice President Valdis Dombrovskis said on March 16.

The conditions the EU has attached to the aid are aimed at modernizing the economy and ridding Kyiv of entrenched corruption.

The aid payment takes the total of EU loans to Ukraine to 2.8 billion euros since 2014. Kyiv badly needs the money. It estimates that a blockade of trade with eastern areas held by Russia-backed separatists that was announced this week would cause the economy to shrink by 2 percent.

In February, European Commission President Jean-Claude Juncker promised to release the aide to Ukrainian Prime Minister Volodymyr Hroysman. A final 600 million euro disbursement is still available under an aid package that expires next January.

Based on reporting by AFP and Reuters