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4 Oct, 2023 14:59

Ukrainian officials fear cash will dry up – WSJ

Kiev is concerned it will not be able to pay its civil servants in November if the US stops sending money, the outlet has reported
Ukrainian officials fear cash will dry up – WSJ

The Ukrainian government could face a shortage of money and be unable to pay salaries if the US Congress fails to approve another injection of funds into the Ukrainian economy, the Wall Street Journal reported on Tuesday.

Citing both Ukrainian and American officials, the outlet noted that a sudden halt to funding could raise discontent in Ukraine and put pressure on President Vladimir Zelensky.

The Ukrainian government will reportedly have to decide what services and salaries to cut in order to stay afloat. The WSJ said the US and other donor nations currently pay the salaries of some 150,000 civil servants in Ukraine as well as over half a million teachers, professors, and school workers. Foreign financing is also covering expenses when it comes to health care and housing subsidies.

A US official told the WSJ that the US Agency for International Development will process an October funds transfer of $1.15 billion through the World Bank as long as Kiev can prove it appropriately spent the previous transfer.

But while Ukraine will likely have the necessary funds to last through October, it will have a harder time beyond that if foreign aid dries up. One Ukrainian official told the WSJ that the government will be able to use some reserve funds to make it through November and December. However, after that, the situation will turn dire without fresh cash injections, the official said.

The WSJ report comes after the US Congress passed a 45-day stopgap government funding bill last week that omitted any aid to Ukraine despite requests from the Biden administration to make sure the cash flow remains uninterrupted. 

Some Republican lawmakers have grown increasingly opposed to sending US taxpayer dollars to support Kiev, insisting that Washington should instead be spending the money on solving long-standing domestic issues.

Since the start of the Russia-Ukraine conflict in February 2022, Kiev has received over $185 billion from the US and the EU in military, humanitarian, and government aid. Nevertheless, Zelensky’s administration has asked for even more and expects another $42 billion from international donors next year, according to Ukrainian Finance Minister Sergei Marchenko.

However, as recently noted by Politico, international support for Ukraine may be waning. The US and EU have admitted that they have started to run out of weapons to send. Meanwhile, the failure of the US to include Ukraine aid in its budget, the vow by Slovakia’s new prime minister, Robert Fico, to stop assistance to Ukraine, and Ukraine's ongoing diplomatic row with Poland have all sent “a chilling message” that Kiev may soon have to consider negotiations with Moscow.