News

Less than half of the financial aid pledged to Ukraine by the west has actually reached Kyiv since Russia’s invasion last year, according to analysis of international financial support.

Ukraine’s finance ministry received €31bn by December 2022 of the €64bn promised by western countries after Russia launched its full-scale attack last February, research by the Kiel Institute for the World Economy has found.

“There is a problem with disbursements, in that they are volatile, delayed and not stable,” said Tymofiy Mylovanov, founder of the Kyiv School of Economics and an adviser in Ukrainian President Volodymyr Zelenskyy’s administration.

The EU and the European Investment Bank have together pledged about €30bn in total since the invasion began, the biggest share of the west’s budgetary support to Ukraine. However, €17.5bn of this sum has yet to reach Kyiv.

“The situation was worst last summer when a lot was promised but not much delivered,” added Mylovanov, but he noted that the trend is set to improve this year.

The EU has overhauled the payout structure for its package last November, promising “regular and predictable financial assistance” of up to €18bn for 2023, at a rate of around €1.5bn each month.

Christoph Trebesch, an academic at the Kiel Institute, noted that it took the EU up to six months to secure legal and political sign-off for some of its financial support in the wake of the invasion.

Such lags are “certainly a problem when you are in the midst of a war, and need to finance large infrastructure expenses [and] an army, while your revenue has collapsed”, he said.

When accounting for military and humanitarian aid, the EU member states and institutions have together committed a total of about €55bn, lagging behind the US, which took the lead in providing Ukraine with the most ammunition and heavy weaponry.

EU aid transfers were also dwarfed by the public funds that member states released to deal with internal economic problems caused by the invasion.

According to data from the Bruegel think-tank, Germany, the bloc’s largest bilateral donor to Kyiv, has committed 7.21 per cent of its GDP to fund domestic energy subsidies last year — 20 times the sum it has pledged to Ukraine.

The Kiel Institute had also found that western economies bore much greater aid costs during comparable conflicts in the past.

Aid to allies in the Gulf war of 1990-91 cost Germany 0.5 per cent of its GDP — almost three times the amount of the country’s current commitment to Ukraine.

“I was surprised how small it is in comparison, because we are now so much richer and economically more powerful than we were [then],” said Trebesch. “That is the key takeaway to me — if we wanted, we could do much more.”

Articles You May Like

Consultants to lose £3bn of UK government work under plan to halve advisory spend
Fed’s Mester sees inflation risks to upside despite better data
Indianapolis kills soccer stadium for existing team to chase MLS dream
Munis firmer ahead of $7.2B new-issue calendar
Mortgage demand flattens even as interest rates hit the lowest level since March