Disputes between EU member states over additional funding could threaten aid for Ukraine — FT

29 August, 06:20 PM
The European Union (Photo:REUTERS/Francois Lenoir)

The European Union (Photo:REUTERS/Francois Lenoir)

EU financial aid for Ukraine is being delayed due to sharp disagreements between member states, concerns about national budgets and rising costs in Brussel, threatening the flow of financial support to Kyiv, the Financial Times reported on Aug. 29, citing its sources.

Brussels' request for EUR 86 billion ($93 billion) in additional funding to support Ukraine for four years has "divided" the member states and led to discussions about reducing the amount and extending the approval period, sources claimed.

EU ministers are were to resume consultations on Aug. 29 after a summer break, with support for Ukraine topping the agenda at meetings of defense and foreign ministers.

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Negotiations on funding were complicated by the fact that the European Commission bundled financial support for Ukraine with demands for replenishment of the EU budget. Many member states stated that while additional financial support for Ukraine is reasonable, other elements of the package are the result of an internal EU budget management problem that does not require additional funds.

The FT notes that Germany and the Netherlands have led the resistance, arguing that "belt-tightening" in national budgets due to rising interest rates and wage requirements should also be reflected in Brussels.

"The timing is not opportune," said one senior EU diplomat.

"Governments are having to make difficult decisions themselves and now Brussels asks them to contribute more. Frankly, ‘Brussels needs our money to increase Commission salaries in line with inflation’ is not a great domestic political platform for a national leader to take."

The dispute lays the groundwork for what is expected to be one of the most intense EU negotiations before the end of this year.

In December 2022, the European Union agreed to provide Ukraine with EUR 18 billion ($19 billion) in macro-financial assistance.

Ukraine and the EU signed a Memorandum of Understanding on its provision on Jan. 16.

Earlier, the media reported that the European Union would cover almost half of Ukraine's financing needs until 2027.

On Aug. 22, the EU disbursed a EUR 1.5 billion ($1.6 billion) tranche of macro-financial assistance to Ukraine out of a EUR 18 billion package. This was the seventh tranche of macro-financial assistance received by Ukraine.

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