We will have to wait for Russian money: $50 billion will not save Ukraine's budget right now

Kseniya KapustynskaNews
Russian money will not come to Ukraine this year
Russian money will not come to Ukraine this year. Source: Created with the help of AI

Ukraine will not receive interest on blocked Russian assets in 2024. During this period, the G7 will only develop a mechanism for transferring funds. Their physical receipt is expected no earlier than 2025, so this will not change the situation with the state budget for 2024.

"The decision on $50 billion from the G7 saves our situation in 2025, but it is very unlikely to affect the budget problems (especially with the military) this year. This challenge will have to be solved with internal resources," explained Yaroslav Zhelezniak, Deputy Chairman of the Tax Committee of the Verkhovna Rada. Yaroslav Zhelezniak (Holos) explained to the Rada.

In other words, this year, to improve the financial situation in Ukraine, taxes may have to be raised. According to experts, this is necessary because of the deteriorating budget situation caused by rising military spending and uncertainty about international aid.

However, as Zhelezniak has already noted, $50 billion will really save Ukraine from the "financial abyss" in the long run. According to him, without these funds, in 2025, Ukraine would have only about $32-35 billion in external financing, out of a need for $32-35 billion:

  • About $3 billion from the IMF;
  • 12.5 billion euros from the EU;
  • "several billion from other countries" – and without clear agreements.

"There was nothing to cover the difference of $10-15 billion. And now there is. This decision just saved us from the financial abyss next year (2025 – Ed.)," the MP stated.

At the same time, when the money starts coming to Ukraine, it can be used for military needs. Unlike macro-financial assistance programs (e.g., the EU), which are used only for non-military needs of the state budget.

In general, the issue of confiscating the "body" of Russia's frozen assets (about $300 billion) remains on the agenda. Ukraine continues to claim these funds, although the mechanism of their possible transfer is still the subject of discussion among international partners.

As reported by OBOZ.UA, the $50 billion loan to Ukraine will essentially be repaid by Russia. Creditors from the G7 countries will receive money from the profits from Russia's seized assets in the EU, the US, and partner countries.

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