Ukraine to boost military spending
The Ukrainian parliament approved on Monday a boost to defense spending amid the ongoing military conflict with Russia.
According to the bill passed by the Rada, the country’s parliament, the government will be authorized to raise an additional 270 billion hryvnias ($7.3 billion) through domestic borrowing.
This will allow an extra 241 billion hryvnias ($6.5 billion) to be allocated to the Defense Ministry and for more funds to be provided to the police, security and intelligence services.
The move comes after the Wall Street Journal reported that a shortage of funds risks becoming “Ukraine’s Achilles’s heel” in the conflict.
“We have to worry about winning the war. It is better to risk high inflation than not to pay soldiers’ salaries,” Finance Minister Sergey Marchenko told the WSJ last week about the National Bank of Ukraine’s strategy of printing more money.
Marchenko told news agency RBC Ukraine on Monday that Kiev hopes to receive $12-16 billion from foreign lenders by the end of 2022. The exact sum will depend on negotiations with foreign partners, he said.
Russia sent troops into Ukraine on February 24, citing Kiev’s failure to implement the Minsk agreements, designed to give the regions of Donetsk and Lugansk special status within the Ukrainian state. The protocols, brokered by Germany and France, were first signed in 2014. Former Ukrainian President Pyotr Poroshenko has since admitted that Kiev’s main goal was to use the ceasefire to buy time and “create powerful armed forces.”
In February 2022, the Kremlin recognized the Donbass republics as independent states and demanded that Ukraine officially declare itself a neutral country that will never join any Western military bloc. Kiev insists the Russian offensive was completely unprovoked.