Ukraine needs €34 billion to stay afloat in 2024, according to the IMF

The U.S. funding debate is critical for Ukraine

editor: REMIX NEWS
author: Denes Albert
Motorcycle riders with Ukrainian and Ukrainian insurgent army flags pass in downtown Kyiv, Ukraine, Wednesday, Dec. 20, 2023. (AP Photo/Evgeniy Maloletka)

Ukraine needs $37.3 billion (more than €34 billion) in aid next year to maintain financial stability, according to an International Monetary Fund (IMF) estimate published Wednesday by the Ukrainian Finance Ministry.

The “timely” arrival of financial aid offered to Ukraine by international partners is “vital” to keep the country’s economy afloat while Russian military aggression continues, Ukrainian Finance Minister Serhiy Marchenko said. Ukraine ends 2023 in a state of uncertainty over the financial aid promised by the U.S. and EU. In the U.S., a new $61.4 billion financial aid package for Ukraine, which Democratic President Joe Biden has asked Congress to approve, is still blocked by Republicans, who are asking Democrats to increase measures against illegal migration in return, according to Hungarian publication Ziare.

Meanwhile, the EU has also failed to approve a new €50 billion financial aid package for Ukraine over the next four years requested by the European Commission, after Hungary opposed it at last week’s EU summit; however, talks will continue and a new summit is scheduled for Feb. 1.

The Ukrainian finance minister said that the amount of foreign financial aid his country needs next year has decreased by about $4 billion compared to previous estimates, following “measures to maximize budget revenues, activate the domestic credit market,” and cut some public spending. Marcenko stressed that Ukraine needs foreign assistance to cover social spending, as the budget is focused on covering military expenditures.

Hungarian Prime Minister Viktor Orbán recently explained why he was blocking the €50 billion to Ukraine, providing two reasons: “The first is that they want to take out another joint loan. So we tried that when we set up this recovery fund in the Covid period, which was set up by the 27 member states taking out a joint loan. Once one country had access to this fund and others did not, for example, not us, we had to admit that this idea of creating money jointly and then not allowing everyone to have equal access to this money was a bad decision. So we should not do it again.”

The second reason Orbán cited is that the war in Ukraine simply needs to end and peace talks need to begin.

“The second problem is to say that the situation in Ukraine is bad. So we should not send more money to the war, we should stop the war, and we should have a ceasefire and peace talks. Instead, they now want to give money to keep the war going. So, we have had many reasons to say, no,” he added.

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