The medium and long-term loans under the EU macro-financial assistance will be paid out in two instalments of up to €500m and each is conditional on the implementation of a specific policy measure outlined in the agreement.

Valdis Dombrovskis, commission vice-president responsible for the euro and social dialogue, who signed the memorandum of understanding, said: “Europe strongly supports Ukraine on its path of economic recovery and reform.

“The new programme of EU macro-financial assistance will help Ukraine reduce its economic vulnerabilities and enhance stability.”

He added that the changes to be implemented under the programme, for example anti-corruption measures, will send a strong signal to international partners and investors, as well as citizens, of the Ukraine government’s commitment to reform the country. 

Ukraine has received a total of €2.8bn from the European bloc since 2014 when war broke out in the east of the country and pro-Russian activists seized control of government buildings.