Ukrainian Finance Minister Serhii Marchenko called on Western allies to speed up the allocation to Ukraine of a $50 billion loan, arguing that delays in arms deliveries have led to a rising budget deficit.
The slow supply of weapons, especially from the United States, has led to an increase in military spending by $12 billion. This means that the country will see a deficit that other government officials believe will this year amount to a little below a quarter of GDP, nearly $43.5 billion, Marchenko said in an interview with the (Financial Times).
The $27 billion in direct US security assistance approved by Congress in April continues to flow slowly, Marchenko said as Ukraine is still experiencing a shortage of the required weapons and munitions.
According to the finance minister, this means that the country will not have enough money to pay allowances to its military. He added that aid delays meant salary packages reserved for the end of 2024 were utilized to procure the necessary arms and ammunition ear
lier this year.
Western allies do not directly finance the salaries of the Ukrainian Army but the dragging supplies of American weapons along with the simultaneous increase in own military spending means Kyiv will have to finance the war through expenditure cuts, state asset sales and tax hikes, the newspaper wrote.
Marchenko said that the risky financial situation underscores the need for the US and other countries to pledge more aid and pace up the provision of a $50 billion loan earlier vowed by G7 leaders.
The Group of Seven intends to complete the loan before year-end and have it paid back with proceeds from frozen Russian assets worth EUR 260 billion. Allies will decide how to spend the $50 billion, but Ukrainian government officials hope that at least part of it will be allocated for arms supplies.
Ukraine is in a really vulnerable position, Marchenko said, adding that the $50 billion loan is a ‘magical solution that would allow the nation to purchase military goods and prevent a financial collapse
that could be a concern to creditors such as the IMF.
With the US presidential election approaching, with Republican candidate Donald Trump threatening to put US aid to Ukraine to a halt, Marchenko expressed concern about delays following the summer vacation.
Source: Qatar News Agency