Ukraine is finding it harder to secure fiscal support as the attention of officers in crucial donor countries shifts to forthcoming elections and geopolitical pressures heighten, Finance Minister Serhiy Marchenko told Reuters on Saturday.”I see a lot of weakness among our partners, they would like to forget about the war but the war is still ongoing, full-scale,” Ukrainian Finance Minister said on the sidelines of the International Monetary Fund (IMF) and World Bank meetings in Marrakech.
War with Russia Exacerbates
As the war with Russia continues, Ukraine needs to secure Western fiscal support to cover a $43 billion budget gap in 2024. Addresses this week have been overshadowed by the conflict between Israel and Hamas, which broke out just as delegates were making their way to Marrakech.
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Serhiy Marchenko said “a geopolitical shift and internal political environment in different countries” was dampening governments’ appetite to support Ukraine, mentioning elections listed in the US and the European Union coming year.
Ukraine has allocated fresh duty bills and finances to be raised from internal debt, but it’ll be dependent on outside help for the bulk of next year’s spending requirements.
“We have earlier made some commitments, like $5.4 billion from the IMF programme, and we intend on our crucial partners and allies the United States and European Union,” Serhiy Marchenko said in the interview.
EU’s 50 billion Euro Package Aims to support Ukraine
The EU is working on a 50 billion – euro ($52.6 billion) Ukraine package for 2024 through 2027. Ukrainian Finance Minister said on seeking 18 billion euros of that in 2024, matching the package received for this year.
Legal Hurdles Complicate Efforts to Access Russian Funds
Serhiy Marchenko welcomed the efforts to harness firmed Russian state means, saying that what was preliminarily portrayed by Western supporters as an “attainable thing” now “sounds like a plan”. Legal concerns, among others, have complicated reclamations.
Since Moscow’s February 2022 invasion, most of Ukraine’s bilateral lenders have suspended repayment of debts until 2027, and the country has agreed a two – time snap on $20 billion of international bonds that runs through August.
Ukraine Explores Options for International Debt Restructuring
Ukraine has been sounding out major investors over plans to restructure the international debt and the possibility of raising fresh backing, Reuters reported on Oct 9, citing people with knowledge of the conversations.
“We’ve some time to prepare conversations with private creditors,” Serhiy Marchenko said, declining to give a timeframe on when formal addresses with creditors may start.
Serhiy Marchenko said credit improvement notes could be “one of the ways” to raise finances, but that how similar guarantees would work depends on the future of Ukraine’s growth, among other profitable factors. This has not been a topic of discussion at the meetings in Marrakech, he said.
Ukraine’s economy is set to grow 5% in 2024, Serhiy Marchenko told the meetings before this week, and sufficient gas storage for the winter should buttress the economy from an implicit rise in prices, he told Reuters.