Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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238. To ask the Minister for Finance the details of the supports his Department has provided for Ukraine and for Ukrainian people since February 2022, whether in Ukraine or within the State; the number of people supported, where relevant; the estimated cost and value of the support, where available; and if he will make a statement on the matter. [8866/23]

Michael McGrath (Cork South Central, Fianna Fail)
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As the Deputy will be aware, the direct provision of service and supports to Ukraine and the Ukrainian people primarily falls to other Government Departments. However, the Department does provide support through a number of indirect channels, notably EU Member State guarantees for Macro-Financial Assistance (MFA) loans and monies to cover the associated interest rate costs; the Revenue Commissioners' tax treatment of Ukrainian citizens who work remotely in the State for Ukrainian employers; and through Ireland’s involvement with the International Financial Institutions.

As regards the first of these, a critical part of the EU’s response to the war has been supporting Ukraine’s financing needs, primarily through MFA loans, which is a form of EU financial aid to EU partner or neighbour countries experiencing a balance of payments crisis. In 2022, a total of €7.2 billion in MFA loans was disbursed to Ukraine. For 2023, the Ukrainian government has estimated a financing gap of approximately €3 billion per month. To help with this, the European Commission proposed an MFA+ package of highly concessional loans of up to €18 billion in 2023. The first disbursement of €3 billion took place in January.

Normally, MFA loans are guaranteed by the Common Provision Fund (CPF) in the EU Budget. This was the case for €1.2 billion of the €7.2 billion loans granted to Ukraine in 2022. However, the high level of MFA activity depleted the CPF in the Multiannual Financial Framework (MFF) 2021-2027. As such, budgetary guarantees were required to assure market participants regarding repayment of the loans, in the event of default by the beneficiary country. As a result, €6 billion of the €7.2 billion loans are provisioned at a rate of 70 per cent of the value of the loans, with the CPF covering 9 per cent and Member State guarantees covering 61 per cent.

This entails national parliamentary procedures. In Ireland, legislation is being enacted to enable the Minister for Finance to enter into the guarantee agreement on behalf of the State. The Member State shares of the guarantee are calculated on a pro-rata GNI basis and Ireland’s share of the guarantee is approximately €76.9 million.

In addition, the EU also proposes to cover Ukraine's interest rate costs on the 2023 MFA loans, through the EU Budget, to the greatest extent possible, with the remainder from Member States. While it is not possible at this juncture to provide an exact cost, the Commission estimates that Ireland’s share of the interest rate subsidy, over the lifetime of the current MFF 2021-2027 ranges between €46 million and €61 million respectively under the baseline and stressed scenarios. However, Ireland’s share of the interest rate subsidy will be dependent on our share of EU GNI in any given year.