Briefly: The European Commission is reportedly working on a four-year financing plan worth tens of billions of euros to help Ukraine rebuild.
Almost a year and a half into Russia’s invasion, Ukraine’s needs are massive:
- 📉 a $38b budget deficit this year alone, plus
- 🏭 $14b in urgent reconstruction for critical infrastructure just for 2023
And while international support for Ukraine is strong, it’s still pretty ad hoc:
- 🇪🇺 Hungary’s PM has often vetoed EU aid for Ukraine, in an attempt at leverage to unblock EU funding for his own country, and
- 🇺🇸 US elections next year inject some uncertainty around US assistance
So that’s why the EU is seeking to put Ukraine’s aid on a longer-term footing. But getting unanimous support across the EU system will be a tough slog.
And that’s just on the financing. In parallel yesterday (Thursday), 47 leaders from wider Europe gathered in a Moldovan castle (just 8km from a Russian-controlled separatist enclave) to discuss security assistance for Ukraine.
Intrigue’s take: World leaders are often better at talking than walking; more comfortable in poetry than prose. But so far, the West’s support for Ukraine has done both: leaders have walked the talk with $168B in aid already.
But placing that aid on a longer-term footing means threading it through more needles: elections, budgetary schedules, gamesmanship. And that won’t be easy.
So at this initial stage, the EU’s long-term aid package looks less like a Marshall Plan and more like a Maybe Plan. And Ukraine will need something firmer.
Also worth noting:
- The IMF approved a $15.6B financing package for Ukraine in March.
- Moldova secured EU candidate status in June of last year. Since then, it’s accused Russia of planning to overthrow the current Western-aligned government.
