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30 Jan, 2024 18:53

Ukraine has no plan B without EU cash – MP

Lawmakers in Kiev believe the government will barely be able to fulfill non-military spending obligations without promised Western aid, Politico reported
Ukraine has no plan B without EU cash – MP

Ukraine will barely be able to continue its conflict with Russia and sustain its economy without financial assistance from the EU and the US, Politico reported on Monday, citing Ukrainian lawmakers and analysts. Kiev is not even considering a scenario in which they do not get the promised aid, one MP admitted to the outlet.

EU leaders will discuss using the bloc’s collective budget to funnel €50 billion ($54 billion) in aid to Kiev later this week. Hungary has opposed the package, suggesting that Ukraine should receive a yearly transfer for economic assistance rather than a four-year, €50 billion commitment in one go.

“We are not currently even considering an option of not receiving this assistance,” Daniil Getmantsev, the head of the Ukrainian parliament’s finance and tax committee, told Politico. The MP said the package was “critical” for Kiev, adding that the Ukrainian government’s non-military spending depended on it.

Another aid package pledged to Kiev by Washington has been stuck in Congress. President Joe Biden requested $60 billion for Kiev in October 2023, but GOP lawmakers have refused to greenlight the bill unless Biden agrees to revise and tighten the US’ border-control laws.

A report issued by the Ukrainian Finance Ministry last November said that the 2024 state budget adopted by the parliament had a deficit of 1.6 trillion hryvnas ($42 billion). Ukraine’s Western backers had provided it with some $73.6 billion in financial aid since the start of the conflict between Moscow and Kiev in February 2022, Politico reported, citing the Center for Economic Strategy – a Kiev-based think tank.

Internal financial resources would not be enough for Kiev to meet its non-military spending commitments, Maria Repko, the head of the Center for Economic Strategy, told Politico. “All analysts agree now that the biggest risk this year is not getting aid,” she said, adding that the only option left for Kiev, in this case, would be to start printing money.

In December, Ukrainian Prime Minister Denis Shmigal allegedly requested an emergency meeting with Kiev’s Western backers to discuss the budget issues faced by his nation. The Ukrainian Finance Ministry said the same month that the state budget might suffer a deficit in the first two months of this year.

Repko admitted to Politico that a quarter of Ukraine’s GDP was generated by territories that have since voted to join Russia in a series of referendums in autumn 2022. Earlier, former Ukrainian Prime Minister Nikolay Azarov compared the national economy to a “zombie” that only shows signs of life with Western financing.