Funding for Western Aid to Ukraine Faces Obstacles
The European Union (EU) discussed in Brussels on the 14th of May to provide 50 billion euros of aid to Ukraine in the next 4 years, including 33 billion euros of loans and 17 billion euros of grants. However, the proposal was not unanimously approved by the 27 EU countries due to Hungarian Prime Minister Viktor Orbán's firm opposition. Now the EU is moving towards a Hungarian-avoiding dossier to help Ukraine, borrowing up to 20 billion euros for Kiev on the capital market, with the final amount of the loan depending on Ukraine's needs.
This lending program is similar to the financing provided by the EU to the EU countries during the COVID-19 pandemic in 2020, which amounted to €100 billion. This program does not require unanimous agreement of all EU countries, as long as the guarantees are made by a few countries with the highest major credit ratings; however, some of the countries that will be responsible for the guarantees, such as Germany and the Netherlands, will need to go through their domestic parliaments again, and if they do not pass the resolutions in time, they will still not be able to provide aid to Ukraine before March next year. Since this proposal only includes loans, not grants, EU officials' first choice is still the 50 billion euro aid program proposed in June, hoping that Oban will pass or give up his veto power at the EU summit on February 1 next year, so that the aid to Ukraine can be passed smoothly.
The U.S. will provide the last $250 million in arms and equipment aid to Ukraine by the end of the year, and all aid to Ukraine will be used up by the end of the year. The Biden administration's $61 billion aid program, which was requested by Congress, was halted because the Democrats and Republicans could not reach a consensus on the U.S.-Mexico border issue. All parties in Europe and the United States are now "tired" of providing huge amounts of aid to Ukraine, and will leave everything to be discussed next year.
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