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5 Feb, 2024 13:09

Germany’s financial woes could delay EU Ukraine aid – FT

Berlin reportedly wants to slash its contributions to the European Peace Facility, citing its generous donations to Kiev
Germany’s financial woes could delay EU Ukraine aid – FT

Bickering among European Union member states over the way the European Peace Facility operates could delay weapons shipments to Ukraine, the Financial Times has claimed.
Germany is reportedly seeking to reduce its share in the fund, which has been used almost exclusively to prop up Kiev militarily. According to the newspaper, Berlin insists that its unilateral contributions to Ukraine should be taken into account.

Back in November, Germany’s Constitutional Court prohibited Chancellor Olaf Scholz’s government from repurposing unused Covid-19 funds, and it took Berlin weeks of negotiations to thrash out a budget for 2024. The deal envisaged cutting the operational costs of various departments and slashing certain climate-related subsidies.

In an article on Monday, the Financial Times, citing anonymous officials, alleged that German officials are demanding that the EPF depart from the so-called reimbursement model, and that the aid provided to Kiev unilaterally should be credited against Berlin’s share in the EU war chest.

Until the terms are clarified, Germany is reportedly holding up a proposed €5bn ($5.4) injection to the EPF, which has been considerably depleted after reimbursing several member states for the weapons they shipped to Ukraine.

The newspaper quoted several unnamed sources as saying that Chancellor Scholz made it clear during a summit last week that “suggestions” made by member states should be taken into account when reforming the fund.

Member states are supposedly hoping to reach a compromise by the end of this month.

The EU’s top diplomat, Josep Borrell, has accused European officials of lacking a “sense of urgency” in dealing with the issue, at a time when the bloc has to “increase our military support to Ukraine.”

Back in December, The Telegraph made similar claims regarding Germany’s supposed gripes over the EPF. The newspaper pointed out at the time that Berlin had contributed approximately a quarter of the fund.

The EPF is distinct from the shared EU budget, which is also being used to shore up Kiev’s finances.

After much internal wrangling, EU leaders signed off on a €50 billion ($54 billion) package of economic aid to Ukraine last Thursday. Brussels managed to overcome opposition from Hungary, which had for weeks blocked the allocation of the funds. Commenting on the outcome, Prime Minister Viktor Orban claimed that Budapest had been “blackmailed” into agreeing.

To accommodate the mammoth commitment, the bloc will have to modify its own budget.

Stateside, a $60 billion defense aid package for Ukraine proposed by President Joe Biden has been in limbo for months, with Republicans insisting they will only unblock it if the White House agrees to tighten controls on the US-Mexican border to stem the flow of migrants.

Meanwhile, officials in Kiev have warned recently that the military is running out of artillery ammunition, with Russian forces having the upper hand in this respect.