Thanks to the IMF: Ukraine has enough money to hold out until May
11 March 07:19
After the IMF loan is approved, Ukraine should have enough budget funds to hold out and fight until early May. Now the EU has time to resolve the issue of Hungary’s veto on a €90 billion loan to Ukraine.
This was reported by "Komersant Ukrainian" with reference to Politico.
According to four sources familiar with Kyiv’s financial situation, Ukraine’s military reserves are not as depleted as politicians feared, and the country will be able to hold out until early May.
The fear was that the money could run out by the end of March, as this year’s budget deficit was at least $50 billion.
However, the situation has now changed. This happened after the IMF approved an $8.1 billion loan to Ukraine in February, of which $1.5 billion was allocated almost immediately.
Why the IMF’s decision is a plus for the EU
In mid-December, EU leaders agreed to provide Ukraine with €90 billion in financial assistance to defend the country against Russian aggression.
However, Hungary recently blocked this initiative, accusing Ukraine of delaying repairs to the damaged Druzhba gas pipeline for political reasons, in order to influence elections that could lead to the resignation of Hungarian Prime Minister Viktor Orbán.
But despite Hungary’s veto, the additional cash reserve from the IMF now gives the EU more time to overcome the threat of a veto from Budapest. For example, after the parliamentary elections, which will take place in April.
Two other diplomats added another fact to Politico. On Tuesday, Dutch Finance Minister Elco Hijen told his colleagues that the country had allocated €3.5 billion per year to Kyiv as bilateral support until 2029.
What the first IMF tranche is for
On March 3, Ukrainian Prime Minister Yulia Svyrydenko announced that the country had received the first tranche of financial assistance from the IMF in the amount of $1.5 billion.
She specified that the money would be spent on priority budget expenditures and macro-financial stability.
At the same time, the IMF report noted that as part of the new financing program, the fund requires Ukraine to adopt a number of tax changes, with a deadline of the end of March.
