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Germany gives the most money of all EU countries - but the Americans are demanding more

The Americans complain that other industrialized countries do not have enough financial commitments to Ukraine.

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Germany gives the most money of all EU countries - but the Americans are demanding more

The Americans complain that other industrialized countries do not have enough financial commitments to Ukraine. "The proportion of direct grants must increase," US Treasury Secretary Janet Yellen appealed to her colleagues at the annual meeting of the International Monetary Fund (IMF) and the World Bank in Washington. Since the beginning of the war, the US has been by far the largest donor to the country attacked by Russia. Many other countries, including those from the European Union, have so far only been willing to give loans. Unlike grants, these have to be repaid by Ukraine at some point.

In recent months there have been repeated disputes between donor states about who will support Ukraine, how quickly and in what form. The short-term liquidity support is mainly needed to maintain the state apparatus, for example to pay pensions and wages for state employees.

In order to better coordinate payments in the coming year, the Ukrainian head of state Volodymyr Zelenskyj has now proposed a new format in which this should be discussed. "It would be good to create a permanent working group that would provide financial support to Ukraine and work on different levels in a timely manner," said Zelenskyy. The Ukrainian President was connected to the annual conference via video.

The format should be based on the so-called Ukraine contact group, which is primarily used to coordinate arms deliveries for the Ukrainian armed forces. This group was launched by the USA in the spring. IMF boss Kristalina Georgieva assured Selenskyj of such a group. "Yes, we do," she said. One wants to set up such a format as soon as possible.

Georgieva estimated Ukraine's liquidity needs in the coming year at three to four billion dollars a month, i.e. up to 50 billion dollars a year. Excluded from this are the much higher estimated costs for the reconstruction of the country. For the current year, there are commitments for grants and loans totaling $35 billion. The sum is considered sufficient. "The IMF assumes that this will fill any financial gaps that will arise in 2022," Georgieva said.

The government representatives gathered in Washington left no doubt about their basic willingness to support Ukraine not only militarily but also financially in the coming year. "Together with the international community and in close cooperation with the Ukrainian government, we will remain committed to supporting Ukraine in the coming months and years," the G7 finance ministers said on the sidelines of the autumn meeting.

However, it is still unclear which country will help how much in the coming year. "It is now a matter of putting that into a long-term perspective, that is, of putting the financing of the Ukrainian state on a secure basis for the next year," said Federal Finance Minister Christian Lindner (FDP). This is now being worked on systematically.

A fixed distribution key is to be found in order to avoid tough discussions about the amount and type of aid, whether in the form of grants or loans, as was the case this year.

Lindner had to experience how tough such talks can be at the G-7 summit he organized in May on the Petersberg near Bonn. There he failed to organize the previously targeted $15 billion in grants from among the leading industrialized countries. At the time, while the United States and Germany were willing to provide grants, the other five countries—France, Britain, Italy, Japan, and Canada—were only willing to provide loans and guarantees.

Even though Germany, with a total of 1.4 billion dollars in financial aid according to the Federal Ministry of Finance, is the largest donor within the European Union, there has always been criticism of the EU in particular. According to the widely acclaimed "Ukraine Support Tracker" of the Kiel Institute for the World Economy, the United States made new commitments - not just financial ones - to the tune of almost $12 billion between the beginning of August and the beginning of October, bringing the total to a good $52 billion military, financial and humanitarian assistance. During the same period, the European countries and EU institutions only increased their commitment by around 1.4 billion dollars and together come to just under 29 billion dollars.

“Large European countries paint a poor picture here, especially as many of the commitments they have made arrive in Ukraine with a very long delay. The low volume of new commitments in the summer now seems to be continuing systematically,” said Christoph Trebesch, head of the team that is creating the Ukraine Support Tracker. The US government has so far been a much more reliable partner for Ukraine than the largest EU countries.

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