Page 68 - UKRRptDec23

"We cannot allow Ukraine to go bankrupt, it's not an option for us. But it's not easy," said the official, who spoke on condition of anonymity to discuss talks between EU leaders held behind closed doors. The person further cast doubt on EU starting formal membership talks with Ukraine, saying expectations for a decision at the same summit next month were "at risk". While Hungary was openly calling for a new EU strategy on Russia's war in Ukraine, the official said others in the bloc were also increasingly asking questions about the future of the war following failed hopes for Ukraine's counteroffensive.
"It's not that people have been calling for peace. Individual members have said very clearly that we at some point need an end to this. The consensus is to continue to provide support to Ukraine, but some of those questions are coming."
Ukraine needs to raise more than $9bn in international aid by the end of the year to fund the budget, the National Bank of Ukraine (NBU) said on November 6, and expects a gradual decrease in assistance over the next two years.
The NBU predicts that while the country will have received over $45bn in international financial aid this year, that figure is expected to decline to $38.5bn in 2024 and further to $25bn in 2025.
Ukraine’s Finance Minister Serhiy Marchenko said the same day that Ukraine will face a $29bn budget deficit next year if international funding dries up. As bne IntelliNews has reported, growing Ukraine fatigue means Ukraine’s funding is increasingly in doubt.
Marchenko emphasised the importance of maintaining macroeconomic stability without which Ukraine may face an economic crisis, with consequences not only for Ukraine but which will also affect the EU.
The US has already cut macroeconomic support to Ukraine in the currently proposed funding package by 20% that has yet to be approved by Congress. The EU has also promised a four-year €50bn macro support package, but Hungary and Slovakia oppose further financing for Kyiv, citing corruption problems.
Marchenko noted that Ukraine is ready to enact further reforms and step up its fight against corruption, but more financial help is needed immediately.
In the meantime, Ukraine is working actively with the International Monetary Fund (IMF) as part of its $15.6bn Extended Fund Facility (EFF) program that was approved in April and is set to conclude in 2027.
During the first ten months of this year, Ukraine received external financing totalling more than $35bn, equivalent to an average of $3.4bn per month. However, the government still requires an additional $9-9.5bn before the end of the year to meet its budgetary needs.
The largest contributors to Ukraine's international financing, comprising 96% of the total, are as follows:
● European Union (EU) - $16.25bn
● United States (US) - $10.9bn
● International Monetary Fund (IMF) - $3.56bn
68 UKRAINE Country Report December 2023 www.intellinews.com