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6.1.3 Budget dynamics - funding
Ukraine might receive no IMF support this year. According to analysts, Ukraine may run out of money from the International Monetary Fund this year due to the operating principles of the organisation's work, writes Bloomberg. The prospect of receiving money from the IMF is very unclear because there is an institutional principle according to which countries that borrow money from the fund must have a clear way of repaying the debt. Ukraine cannot do this because Russia has occupied part of Ukraine, and factories and ports have been destroyed. However, there is an assumption that Ukraine may become an exception to the rule. Therefore, the IMF will have to decide whether to help Ukraine by either breaking or changing its rules. To receive money from the IMF, the Ukrainian government must present a sustainable debt program, a standard requirement for assistance from the lender of last resort.
By the end of the year, Ukraine expects to receive another $12 to 16B from the West. Since the beginning of the war, foreign partners have already provided Ukraine with $14B. The Finance Ministry expects to receive another $12 to 16B by the end of the year, said Finance Minister Serhiy Marchenko. "The amount of aid depends on the success of the negotiations; it can be up to $30B, including the money we have received since the start of the war. We have already received $14B, so, by the end of the year, we might receive another $12 to 16B," Marchenko said. According to the minister, the government expects to receive additional macro-financial support from the EU in September. However, he noted that not all of the promised €8B will arrive in September, as several tranches are expected.
Ukraine has received $3B in financial aid and will receive a new $3B military aid package from the US. US President Joe Biden announced allocating the largest package of military assistance thus far to Ukraine for $2.98B, the White House press service reported. According to Biden, Ukraine will receive air defence systems, artillery systems, ammunition, unmanned aerial systems, and radar systems to ensure it will be able to continue defending itself over the long term. In addition, Ukraine received $3B in financial aid from the US on August 24, announced Prime Minister of Ukraine Denys Shmyhal. The money was delivered to Ukraine in the form of a grant through a mechanism of the World Bank. This is the first tranche of an additional $4.5B in direct budget support.
Ukraine will receive a new €500M military aid package from Germany. The German government has decided to provide Ukraine with a new military aid package totaling €500 million, Bloomberg reported. German Chancellor Olaf Scholz completed the coordination of the planned supply of additional weapons and ammunition to Ukraine. As part of this package, Ukraine will receive ammunition, devices for combating drones, and armoured evacuation vehicles in the coming weeks. “We have launched a new package, including advanced air defence systems, missile launchers, tons of ammunition, anti-drone equipment, and armoured recovery vehicles," the German chancellor said. The first part of the aid package is expected to arrive in Ukraine in the coming weeks. However, the remainder of the aid will be delivered in 2023.
The European Union explains the delay of €8B in aid for Ukraine. The delay in providing Ukraine with the second tranche of macro-financial
44 UKRAINE Country Report September 2022 www.intellinews.com