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of 1.5bn euros in April. Taking into account the fact that the budget now receives large revenues from increased taxes for banks and dividends from state-owned companies, for the first 4-5 months (until June - ed.) we are more or less provided for. But we need at least $3bn of international funding per month, and so far we have not reached this level for the year," RBC said -Ukraine head of the analytical department of Concorde Capital Investment Company Alexander Parashchiy.
Shortages or delays in external and/or domestic financing could lead to larger deficits, the latest version of the memorandum with the IMF says. “The €50bn EU program for Ukraine is a significant positive development, but uncertainty remains regarding the timing of the approval of budget support by the US Congress... Shortfalls or long delays in donor funding may require the authorities to take immediate countermeasures,” the document says.
The total amount of budget support from the United States is expected to be almost two times less than from the EU - about $8bn, but it is this that, provided that it is received regularly, determines the possibility of meeting budget expenditures. If this funding is not available, then Ukraine will have to: a) look for alternative sources, which is quite difficult to do in such volumes; b) reduce expenses, which in general is also not easy, given that the budget was already formed in conditions of maximum cost savings; c) increase the tax burden.
But, most likely, you will have to do everything together. The IMF memorandum mentions both the possibility of increasing financial pressure and reducing spending in a situation of lack of external financing.
2.5 Politics - misc
● International Politics
Erdogan offers to host Ukraine-Russia peace summit after meeting Zelensky. Turkish President Recep Tayyip Erdogan said that Turkey is ready to host a peace summit between Ukraine and Russia after the meeting with his counterpart Volodymyr Zelensky on March 8 in Istanbul.
The EC reveals the details of the EU's defense strategy on March 6. Vice President of the European Commission Margrethe Vestager said the new system should allow the EU to move "from a crisis response regime to a structural defense readiness regime that closely integrates Ukraine. It is also a signal about the future of Ukraine as a member of the EU to say that Ukrainian defense capability is part of this ecosystem," she said. The main reforms in the EU countries relate to regulating the EU’s defense market and the transition to joint production and procurement. Currently, defense spending by member states is being mainly conducted outside the EU. By 2030, the EU must spend at least 50% of its defense budget within the EU and 60% by 2035. The introduction of the joint procurement scheme should allow cost savings due to the abolition of the value-added tax. It is planned that by 2030, the EU will purchase at least 40% of its defense equipment within the framework of joint procurement.
What will the EU's new defense and industrial strategy give Ukraine?
Integration and support of the Ukrainian defense industry have become one of
14 UKRAINE Country Report April 2024 www.intellinews.com