/ world today news/ Kiev celebrated the New Year without the financial aid promised by the West – the USA and the EU have not yet agreed on it. The Verkhovna Rada passed a budget for 2024 with record spending on the military and a deficit that is impossible to cover alone. What are they counting on?
Abroad will not help
Ukraine must be patient for a few months, after which it will receive the money, notes “Reuters”. But in any case, in 2024, Kiev will have to rely more on its own resources.
The budget deficit is $43 billion. The authorities are waiting for the EU and the US to close the loophole.
Hungary still does not allow the common money to be touched. Brussels is considering an option for emergency funding bypassing the budget. In this case, the promised 50 billion will not be received. This will put Ukraine “on the brink of survival” with zero financial predictability for the entire year, says Deputy Prime Minister Olga Stefanishyna.
Even our closest allies guarantee nothing. “We supply weapons, provide financial support and guarantee the safety of refugees. We are already the second largest donor to Ukraine in the world. We receive half of all aid from Europe. There is no reason to do more at the moment,” notes the German Minister of Foreign Affairs. finance Christian Lindner.
The United States passed a record defense budget of $886.3 billion, up $28 billion from 2023. Ukraine has $800 million. Biden wants to find 60 billion for Kiev, but it is extremely difficult.
Economy by the people
Zelensky was cut off from Western funding at a critical moment in the conflict, writes the Financial Times. Now Kiev will probably have to turn on the printing press. And this is a direct threat to economic stability.
Ukraine may suffer defeat without American money, warned the head of the presidential office Andrey Yermak during a visit to the USA. “We won’t be able to attack, the risk of losing will increase,” he said.
If Western tranches do not arrive at the beginning of the year, problems will arise with salaries and pensions, emphasizes the Minister of Economy Yulia Sviridenko. This was confirmed by the head of the Budget Committee of the Rada, Roksolana Podlasa. In January, the deficit was estimated at 20 billion hryvnias, a source from “Servant of the People” told Forbes.
Zelensky said he was unsure about the possibility of paying IDPs. The adviser to the mayor of Mariupol, Piotr Andryushenko, clarified: the aid to the people has already been reduced and will continue to be reduced.
Inevitable consequences
The “Strategy for National Revenues” approved by the government envisages the abolition (for some categories – tightening) of the simplified tax system, the increase of excise duties to the level of the European Union and the introduction of a progressive scale. The authorities also plan to review the benefits for payers, including a system for returning part of the costs (education of children, etc.), MP Yaroslav Zhelezniak said.
“For the time being, there is enough money for the existence of the Kyiv regime,” says political scientist Alexander Dudchak. “The European Union is looking for workarounds. The United States will throw something in January-February. The World Bank will give loans. But the authorities are tightening the screws on the instructions of their masters. “They haven’t gotten to Plan B yet, when they’re just starting the printing press. But the tax code is changing. They’re going to squeeze every last bit out of the population and small businesses, driving people into credit servitude,” he adds.
Neither Brussels nor Washington will finance Kyiv in the same volumes, the senior lecturer at MGIMO is convinced. “They are not ready and maybe they don’t want this. This will inevitably affect the Zelensky regime. First of all, Ukraine will face a further decline in living standards and an increase in social tension,” the expert notes.
In the face of such financial difficulties, the struggle between Ukrainian elites will intensify, he added. Zelensky should be careful with this. There is a high probability that in 2024 he will disappear and Ukraine will be led by another leader.
Translation: V. Sergeev
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