It said that the new macro-financial assistance (MFA) programme would need to be approved by the European Parliament and the Council of Ministers of the EU.

Pending approval, funds would be disbursed in instalments during 2015, and in early 2016, to the recession-hit country.

This is the third MFA to Ukraine since 2010, aimed at assisting the country economically and financially with critical challenges, such as its weak balance of payments and fiscal situation.

European Commission President Jean-Claude Juncker said: ‘The European Union has provided unprecedented financial support and today’s proposal proves that we are ready to continue providing that support.

‘This is European solidarity in action. As always, solidarity goes hand in hand with commitment to reform, which is urgently needed in Ukraine. We want to help the Ukrainian government to put its reform agenda into practice and trigger real change for the country and its people.’

Reform policies include further fiscal consolidation, continuation of the comprehensive reforms in the energy and banking sectors, as well as improving overall macroeconomic management.

It will also be important to strengthen economic governance, transparency and pursue judicial reforms and the fight against corruption in order to improve conditions for business activity and sustainable growth, the commission noted.

In 2014, the commission promised €1.36bn in support of Ukraine under existing programmes. The final tranche of €250m under these programmes will be made by spring 2015, it said.