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6.1.3 Budget dynamics - funding
The US has passed $40B in financial aid for Ukraine. The President of Ukraine, Volodymyr Zelenskyy, thanked the House of Representatives of the United States of America, particularly Speaker Nancy Pelosi, for the prompt approval of the law on additional financial support for the Ukrainian state. The Lower House of Congress has reportedly passed Bill H.R. 7691, which provides for an additional allocation of about $40B to respond to Russia's aggression against Ukraine. Last month, US president Joe Biden sent a proposal to Congress to approve a new package to allocate $33B to support Ukraine. While working on the document, the lawmakers proposed an additional seven billion for food aid and military equipment for Ukraine.
The EU will provide €9B in macro-financial support to Ukraine. European Union leaders have decided to provide Ukraine with a €9B loan to meet urgent budget needs, stated European Commission President Ursula von der Leyen. Currently, Ukraine needs about €5B a month to cover essential payments. To close this gap, the EU will provide Ukraine with an unprecedented package of macro-financial assistance confirmed the President of the European Council, Charles Michel. The macro-financial support from the EU will be provided as a long-term loan, but with very low-interest rates that are close to zero.
The President of the EIB has supported a multi-trillion plan to rebuild Ukraine. A top European official has backed a multi-trillion-euro ‘Marshall’ style plan to rebuild Ukraine, pledging the firepower of the EU’s lending arm for what he said must be a global rescue effort. Werner Hoyer, president of the European Investment Bank, said Europe must not be left alone to foot the vast bill he predicted could run into the trillions. Under the post-World War Two US system known as the Marshall Plan, the United States granted Europe the present day equivalent of some $200B over four years in economic and technical assistance. Addressing the need for a similar program for Ukraine, Hoyer told Reuters that the cost of rebuilding the country had been discussed at recent meetings at United Nations, the International Monetary Fund, and World Bank in Washington.
The EBRD intends to invest $1B in Ukraine this year. The European Bank for Reconstruction and Development (EBRD) plans to invest $1B in 2022 and is ready to finance Naftogaz, said Bank President Odile Reno-Basso. "We want to continue investing, and pledge $1B for this year, and we are focused on supporting critical infrastructure, such as the power supply network (Ukrenergo). We are also reserving Naftogaz's credit line to support their working capital and liquidity," she said on Wednesday at the World Economic Forum. In addition, the EBRD intends to propose an investment plan to support these companies and the private sector in general, to provide credit lines for agribusiness, pharmaceuticals, and more, she added.
Ukraine will receive only $2B from its international partners in May. In May 2022, Ukraine will receive up to $2B from its international partners against the required $5B per month, said Finance Minister Serhiy Marchenko. Unfortunately, we will not have $5B in May. So far, we have received only $1.2B, and by the end of this month, we expect to receive up to $2B, said Marchenko. The Ministry of Finance may partially close the liquidity problem through military bonds, but the ministry can only raise $1B a month through this instrument. The minister explained that the National Bank is trying to
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