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BRUSSELS, July 8 (Xinhua) -- The European Commission here on Wednesday said that it adopted on Tuesday a decision to initiate a process towards disbursing 600 million euros to Ukraine in the form of a loan.

According to a Commission press release, this move corresponded to the first instalment under EU's new macrofinancial assistance (MFA) program for Ukraine, which amounts to a total of 1.8 billion euros in medium-term loans.

The decision builds on the Memorandum of Understanding (MoU) and Loan Facility Agreement (LFA), which Ukraine and the EU agreed in May in Riga. The MoU came into force last Friday.

According to the press release, through this program, the EU contributes to cover the urgent financing needs faced by Ukraine, while supporting the country's economic stabilization. In addition, the EU's MFA package will assist the Ukrainian authorities in implementing important reforms in the areas of public finance management, governance and transparency, the energy sector, social safety nets, the business environment and the financial sector.

Macrofinancial assistance operations are part of the EU's wider engagement with neighboring countries and are designed as an exceptional EU crisis response instrument available to EU neighboring countries experiencing severe balance of payments problems.