Ukraine’s finance minister says crucial Western financial support is “not charity” but “self-preservation” in the fight to defend democracy as his country deals with growing costs to repair electrical and heating infrastructure wrecked by Russian attacks.
Serhiy Marchenko also told The Associated Press in an interview Thursday from Kyiv that he believes European Union officials will sort out a dispute with Hungary that has blocked a key 18 billion-euro ($18.97 billion) aid package and would cover much of Ukraine’s looming budget gap.
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Marchenko said financial support for Ukraine is tiny compared to what developed countries spent to combat emergencies like the global financial crisis of 2008 and the COVID-19 pandemic. And that the money bolsters freedom and security far beyond his country’s struggle, he added.
“It’s not charity to support Ukraine,” Marchenko said. “We are trying to protect freedom and democracy of all (the) civilized world.”
He said the damage from Russian missile attacks on civilian infrastructure such as power stations would cost 0.5% of annual economic output next year, adding to the burden as Ukraine tries to cover a budget deficit equivalent to $38 billion. The World Bank put Ukraine’s gross domestic product at just over $200 billion in 2021, so the damage could amount to roughly $1 billion.
Ukraine needs outside financing to cover the budget deficit caused by the war. Cash or loans help it avoid printing money at the central bank to cover basic needs like paying people’s pensions, a practice that risks fueling already painful inflation.
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Proposed EU loans worth 18 billion euros, along with major U.S. support and possible help from the International Monetary Fund, would cover a large part of Ukraine’s budget shortfall. But the European package has been blocked by Hungary over disputes with Brussels, which is concerned about democratic backsliding and possible mismanagement of EU money in Budapest.
“Of course, it’s worried us and we’re worried that it can block or postpone the money flow for Ukraine,” Marchenko said. “But I believe that the wisdom” of EU officials “can solve all issues, and they will together join Ukraine’s efforts for independence.”