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of law. This should not happen again," Juncker said.
During a conversation with the press on the sidelines of the third Summit of the European Political Community in Granada this week, Zelenskiy said the comments were a rehash of Russian talking points.
"[Russians] realised that they cannot break European unity and European support for Ukraine. And the United States, through its intelligence, sees the roots of all this, where it grows from and how Russia is trying to break the balance of power in the world, to undermine our support," the president said.
"Russia has found information that
in some of our government agencies, someone is allegedly stealing some
of the funds that come to us as part of support,” Zelenskiy said. "Of course, there are many different people. It is difficult for our judicial system to control everything. This is true. But in any case, we are working to ensure that not a single dollar or euro that comes from partners ends up in the pockets of those for whom they are not intended," the head of state said.
Juncker is probably referring to Romania, which was admitted into the EU on January 1, 2007, three years after the main wave of former Warsaw pact countries were admitted. At the time Romania was considered one of the most corrupt countries in Europe and many said that it was also not ready to join.
On October 1, the US government voted through a new spending bill to avert
a government shutdown; however, a $300mn provision for Ukraine was removed, which has had in effect frozen Ukraine’s US funding for the meantime. The Pentagon later said that it still has $5.2bn of funds in the kitty of pre-approved money, enough to last another six months, but after that is gone the mooted new $24bn package will have to be approved.
The issue that removed Ukraine’s $300mn provision from the spending
bill was a lack of accountability. “The American people want to know how their
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money was spent,” said then-Speaker Kevin McCarthy ahead of the vote.
Less well publicised, the EU has precisely the same reservations with its mooted €50bn support package that is to be paid out over the next four years. This week, the EU voted through a new multi-year budget for 2021-2027 that locks in €50bn of funds for a special Ukraine fund. But in the talks in Kyiv this week between EU foreign ministers and Ukrainian President Volodymyr Zelenskiy, the EU included reform of the justice system, corruption, money laundering elimination and better accountability of the spending.
The European Parliament's budget
and foreign affairs committees overwhelmingly supported a proposal for a multi-year, €50bn plan, but one
of the key demands from MEPs was for safeguards against corruption, fraud and other violations in the use of European funds in Ukraine. Among other things, the deputies stressed that companies with oligarchic influence should not receive funding as well as changes to promote greater transparency with
all the spending and procurements published on a special website. The whole project will be put to a vote in the Rada on October 16-19.
Huge amounts of money have been sent to Ukraine in the last year. The EU has allocated €85bn in macro and military support in 2022, according to EU foreign policy chief Josep Borrell, while the US has spent about $46bn in just macro support, and military aid brings the total up to around $113bn.
But the West was not always so generous. While military aid was immediately forthcoming, as the West sent physical weapons to Ukraine, not the money to buy them, for the first six months of the war the West was very reluctant to send the government cash to fill in a gaping $4bn a month hole in the budget. By the summer of 2022 Ukraine was running out of money and the government was in danger of shutting down.
Kyiv was desperate for cash to cover the deficit, but US senators blocked any transfers, demanding accountability for any aid they sent. Likewise, the EU was
reluctant to send money, saying it feared the corruption in Ukraine and worried all the funds would simply be stolen. However, as a budget crisis loomed ever larger, both Brussels and Washington bit the bullet and promised packages of €18bn and $18bn respectively. (The US later quietly reduced its contribution to $9bn.)
Part of the reason for the West’s enthusiasm for sending arms to Ukraine and not cash is that buying more arms boosts the Western economies and is
a de facto easy-sell new tax on their citizens, whereas sending cash to Kyiv is lost money that brings no benefit to the donor’s economy.
These worries over corruption have not gone away. Politico reported this month on a leaked US strategy paper that sees corruption as a much bigger issue than the Biden administration is willing to admit in public.
“Biden administration officials are far more worried about corruption in Ukraine than they publicly admit, a confidential U.S. strategy document obtained by Politico suggests,” the magazine reported.
“Perceptions of high-level corruption” the confidential version of the document warns, could “undermine the Ukrainian public’s and foreign leaders’ confidence in the war-time government,” the article says.
A second US official familiar with
the discussions confirmed to Politico reports that the Biden administration
is talking to Ukrainian leaders about potentially conditioning future economic aid on “reforms to tackle corruption and make Ukraine a more attractive place for private investment.” Military aid will not be made conditional, the report said.
Attack on the oligarchs
Worries about endemic corruption run as a thread through all of Ukraine’s post- Maidan recent history. In 2014 Ukraine was given an Extended Fund Facility (EFF) in March 2015, an International Monetary Fund (IMF) support programme that runs over several years, but half the money was never distributed and eventually