Ukraine’s finance minister has said crucial Western financial aid is “not charity” but “self-defense” in the fight for democracy as his country grapples with the rising cost of repairing power and transportation infrastructure. heating shattered by Russian attacks.
In an interview with The Associated Press on Thursday in kyiv, Serhiy Marchenko also said he believes the European Union will resolve a dispute with Hungary that has blocked a key aid package, worth 18 billion euros ($18.97 billion), that would cover much of the looming Ukrainian budget deficit.
Marchenko noted that aid to Ukraine pales in comparison to what developed countries spent to combat emergencies like the 2008 global financial crisis and the COVID-19 pandemic. And that money also bolsters freedom and security beyond war in his country, he added.
“Supporting Ukraine is not charity,” Marchenko said. “We are trying to protect the freedom and democracy of the entire (the) civilized world.”
According to the minister, the damage caused by Russian missiles in their attacks on civilian infrastructure such as power plants would cost 0.5% of annual economic output in 2023, which would add to the burden already faced by the country, which is trying to cover a budget deficit equivalent to 38,000 million dollars. The World Bank estimates the Ukrainian Gross Domestic Product at just over 200,000 million in 2021, so the damage could be around 1,000 million dollars.
Ukraine needs foreign financing to cover the budget deficit caused by the war. Cash or loans help you avoid printing more money at the central bank to cover basic needs like pension payments, a practice that could fuel already high inflation.
The proposed EU loans, worth 18 billion euros, plus significant backing from the United States and possible help from the International Monetary Fund, would cover much of Ukraine’s budget deficit. But Hungary has blocked the European package over disputes with the bloc, which is concerned about democratic backsliding and possible mismanagement of EU funds in Budapest.