The European Union will ask international partners for additional funding for Ukraine as the war-battered nation risks running out of money in the fifth year of Russia’s full-scale invasion.
EU leaders will call “for intensified outreach to third countries to help close the remaining gap of €30 billion when they gather for a summit meeting in Brussels later this month, according to draft conclusions.
The bloc agreed in December to provide Kyiv with €90 billion in loan assistance for this year and next, financed through joint borrowing after several member states balked at tapping frozen Russian central bank assets to underwrite the loan.
But the package remains on hold for now. Hungary last month vetoed the aid as part of a dispute with Ukraine over supplies via the Druzhba pipeline, which carries Russian oil through Ukrainian territory.
Budapest has accused Kyiv of dragging its feet in restoring supplies after the pipeline was damaged in a Russian air strike. Kyiv has denied Hungary’s claim.
The dispute puts Ukraine and its allies in a bind. Kyiv could run out of funding unless the first disbursement of the EU package arrives by early April. Budapest has insisted it will not lift its veto unless oil supplies via Druzhba resume.
Some member states have proposed a fact-finding mission to Ukraine with the participation of Hungarian and Slovak experts as a way to resolve the dispute.
“We agreed to provide Ukraine with a €90 billion loan, and this we also must deliver,” EU top diplomat Kaja Kallas said at a news conference in Warsaw on Wednesday. “A broken pipeline shouldn’t hold Ukraine’s defence hostage.”
The EU has reached out to other countries, including from the Group of Seven (G7) economies, to provide bridge financing and ensure Ukraine’s financial needs are covered.
The topic is expected to come up when finance ministers gather in Washington in April for the International Monetary Fund meetings.
Tight finances are adding to pressures faced by Kyiv as it tries to secure military equipment, in particular air-defence systems. The conflict in Iran is having an impact on US stockpiles and could potentially reduce their availability for Ukraine, according to people familiar with the matter. They declined to be named because the talks are private. – Bloomberg
