EU Macro-Financial Assistance Conditions: What Needs to Change in Procurement and Financial Control

On May 28, the Verkhovna Rada ratified a memorandum with the EU on the provision of EUR 90 billion in assistance through the end of 2027. The funds will go toward both defense needs and broader economic support.

In April, the EU approved the allocation of the first half of this loan:

• EUR 28.3 billion to support Ukraine’s defense industrial capacity — including for weapons procurement;
• EUR 8.35 billion through the Ukraine Facility, partially covering reconstruction, education, and other non-military needs;
• EUR 8.35 billion through macro-financial assistance, which will most likely be available for general budget expenditures.

To receive all three tranches, Ukraine has committed to maintaining effective democratic mechanisms, multi-party parliamentarism, human rights (including minority rights), and anti-corruption efforts — including a commitment not to reverse anti-corruption measures introduced under EU or IMF support instruments. Additional commitments cover transparency, accountability, effective management of public assets, central bank independence, and economic policy more broadly.

The macro-financial assistance tranche — the first portion of which amounts to EUR 8.35 billion and will be disbursed in three installments — carries its own specific conditions. These are designed to ensure Ukraine mobilizes domestic revenues, improves public expenditure efficiency, and strengthens public financial management. Many requirements accordingly address the tax system, customs, budget planning, and investment management. 

There are also measures concerning procurement, the Accounting Chamber, and the State Audit Service — here is a closer look at each.

Appoint the three missing experts to the accounting chamber selection commission

Six of the eleven positions on the Accounting Chamber are currently vacant. A competition for new members formally launched a year and a half ago but has since stalled entirely: the Verkhovna Rada has not approved the composition of the Advisory Group of Experts (AGE) that is to conduct the process. The group is to comprise six members — three from the Ukrainian side and three from international partners. While the international nominees were selected relatively quickly, parliament has yet to settle on its own representatives. 

This is not Ukraine’s first such commitment. In February 2026, completing the competitive appointment procedure for Accounting Chamber members appeared as a requirement in the memorandum with the IMF — and Ukraine has already missed the declared intention to form the advisory group by the end of April this year. 

The formation of the AGE will now also be a condition of EU macro-financial assistance.

Develop and present a new Public Procurement Strategy for 2027–2030 to the European Commission

The current public procurement reform strategy covers 2024–2026. In practice, however, it has been largely nominal: the Government did not adopt an action plan for its implementation in 2026, and even the steps planned for earlier periods were only partially completed — in part because many of them logically follow the update of the primary legislation, a process that stretched over two years. 

But on May 27, parliament finally adopted the new Public Procurement Law. Over the coming years, Ukraine will need both to implement it in practice — adopting around 40 pieces of secondary legislation and making the necessary technical upgrades to Prozorro — and to complete legislative harmonization. A robust sector development strategy will be essential to planning this work properly and navigating the challenges ahead.

Prepare a concept note on a defense procurement law

This marks what may be the first time the European Commission has set specific timelines for harmonizing defense procurement legislation with European standards. The Ukraine Facility previously covered only the reform of public procurement, public-private partnerships, and concessions — with a deadline in the third quarter of 2027.

Based on the wording of the condition, the concept note is to be developed this year. A separate challenge here — and throughout the broader harmonization of defense procurement legislation — will be establishing which body is responsible: the Ministry of Economy, which sets procurement policy; the Ministry of Defense, which does so for the defense sector; or parliament.

Prepare structural changes at the state audit service

The European Commission is calling on Ukraine to develop proposals for a clear organizational and managerial separation between inspection and audit functions within the State Audit Service.

These two activities differ in purpose, procedure, and methodology. Audit is oriented toward helping the entity under review systematically improve its operations — trust and cooperation are essential here, enabling auditors to provide the most useful recommendations possible and ensuring those recommendations are properly implemented. Inspection, by contrast, involves a detailed examination of financial and operational activities for legal violations, with the possibility of liability for those found at fault. This is not a partner trying to help — it is a controller looking for errors. 

Currently, auditors and inspectors work within the same thematic departments — for example, the local budget oversight department or the construction sector oversight department. When an audit uncovers indications of violations, inspectors from the same unit may initiate an inspection of the same entity, even though this practice is inappropriate. It undermines confidence in audits, makes them less effective, and blunts their focus.

The need to separate these two forms of oversight has already been recognized in the Public Financial Management Reform Strategy for 2026–2030, which envisages the separation of audit and inspection functions within the State Audit Service by the end of 2027. Under the further development of the state internal financial control system, the State Audit Service’s audit function is expected to increasingly serve as an independent external assessment of management systems — complementing the internal audit conducted directly within government bodies.

On one level, the macro-financial assistance conditions relating to procurement and financial control may seem relatively modest — particularly compared with what is being asked on the tax side. That impression, however, could be misleading. Ukraine has been unable to appoint the Advisory Group of Experts to finally launch the Accounting Chamber competition for over a year. Initiating the reform of defense procurement legislation is also a substantial undertaking. 

The fact that the European Commission has included these reforms among the conditionality is a signal that they genuinely matter. But for them to become true priorities, they will require awareness of that need — and political will — at multiple levels within the country.

This material is funded by the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.