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If this does not happen, Ukraine will have to cut funding for state programs, the head of the Budget Committee of the Ukrainian Parliament, Roksolana Podlasie, reported.
Funding cuts may affect business support programs, capital expenditures may be reduced, and tax redistribution in favour of the state budget may have to continue.
"Discussions on redistributing taxes from local to state budgets will continue," she said. The need for international financing for 2024 is $41bn.
The US is expected to allocate $8.5bn, the IMF - $5.4bn, Canada - $1.9bn, and Japan - $4.5bn.
The EU is looking for ways to finance the Ukrainian budget deficit next year, and Ukraine is expecting to receive more than $30B in funding. The EC is considering all possible options to finance and support Ukraine but hopes that the EU Council will approve the Ukrainian Fund, which will provide funds to Kyiv from 2024 to 2027, said Executive Deputy Chairman of the EC Valdis Dombrovskis. He noted that, in any case, Ukraine’s financing deficit will probably remain huge. Therefore, the EU needs to move quickly to adopt the Ukrainian Fund since the deadlines are very tight, and the new payments should start at the beginning of January. Prime Minister Denys Shmyhal announced that Ukraine expects to receive $5.4B in financial aid from the IMF, €18B from the EU, over $10B from the US, and additional budget support from Japan, the UK and other allies. At the same time, Shmyhal emphasized that it is challenging to finance military budget expenditures with a ₴1.570 trillion deficit, "but we managed to cope with it both last year and this year."
The EU will provide Ukraine with €250M for rapid recovery. Ukraine and the EU have already approved the relevant agreement. These funds will be used to rebuild bridges, railways, schools, kindergartens, hospitals, and residential buildings. In addition, the funds will support Ukrainian farmers.
The EU has found a way to bypass Hungary's veto of €50B for Ukraine.EU countries are considering an alternative plan to provide Ukraine with much-needed help in its fight against Russia if Hungary vetoes the current €50B funding proposal. According to Bloomberg, the proposal will involve national guarantees for member states to raise funding in the markets if Budapest blocks the EU's long-term budget review, which includes the package and requires unanimity. Kremlin-friendly Hungarian Prime Minister Viktor Orbán is counting on the quick allocation of at least part of the more than $30B for his country that the EU froze last year over fears over the nation’s retreat from democracy. Hungary told EU member states this week that it wants to assess the amount of financial aid and risk factors such as corruption. Some countries favor finding an alternative funding solution for Ukraine as soon as possible to increase pressure on Orbán.
The European Commissioner noted that Budapest has made "certain progress" over the year, but this is still insufficient to restore tranches of aid to Hungary. He also believes that Hungary will not be able to constantly use consensus voting since the EC can make the necessary decisions, bypassing Hungary. Hahn believes that Hungary, which often blocks EU decision-making,
72 UKRAINE Country Report December 2023 www.intellinews.com