Next year, the EU may transfer Russian assets to Ukraine due to a shortage of funds — Bloomberg

The International Monetary Fund estimates that Ukraine could face a funding shortfall of between $30 billion and $35 billion next year. According to Bloomberg, such a shortfall could force the European Union to transfer frozen Russian assets to Ukraine.

According to their data, the shortfall will amount to $17 billion in 2028 and $2 billion in 2029.

It is noted that these figures are still subject to change. The International Monetary Fund declined to comment.

Aid from Partners and Reform Requirements

Ukraine’s donors met in Brussels to accelerate negotiations on providing financial assistance.

Earlier this year, the European Union approved a €90 billion ($102 billion) loan package and is calling on partners to fulfill their commitments to provide an additional €30 billion for this year and next.

At the same time, the European Commission and the IMF are urging the Ukrainian government to implement a reform plan to unlock the aid and improve the management of funds.

According to European Commission spokesperson Balázs Ujvári, EU Commissioner for Economic Affairs Valdis Dombrovskis and Ukrainian Finance Minister Serhiy Marchenko will discuss the reforms needed for the next tranche.

Search for New Sources of Funding

EU member states continue to discuss mechanisms for further support for Kyiv amid the ongoing war.

In particular, some countries have revisited the idea of using the 210 billion euros in assets of the Central Bank of Russia that are frozen in Europe. Other countries are proposing to issue joint EU debt obligations. 

This was reported by Bloomberg.

The EU has tied additional financial aid to Ukraine to reforms, according to Bloomberg.

Ukraine could lose a significant portion of the projected $29.5 billion in international funding if lawmakers fail to pass the necessary bills by the specified deadlines. Prime Minister Serhiy Koretsky has set deadlines for votes in the Verkhovna Rada, and further financial aid from partners depends on meeting these deadlines.

Ukraine received a list of reforms from the EU in response to its request for funds.

Ukraine will soon receive $841 million in budgetary support from the World Bank. The funds will be used to offset state budget expenditures related to pension payments, and the Canadian government will provide financing guarantees.