While the EU’s €50 billion is earmarked for deployment over the period until 2027, the International Monetary Fund puts Ukraine’s funding gap at more than $40 billion this year alone.
For Kyiv, one of the biggest risks is that a shortfall in aid would be likely to pressure it down the inflationary path of printing significant sums of new money.
Last week’s EU deal, at the second attempt after Hungarian Prime Minister Viktor Orbán blocked the agreement in December, was celebrated as an endorsement, eventually, of the bloc’s commitment to its neighbor. European Commission President Ursula von der Leyen hailed it as “what it means to stand with Ukraine for as long as it takes.”
Leaders’ relief after their Brussels summit was palpable. But officials acknowledge that nobody is popping champagne corks. It’s nothing other than a “step in the right direction,” Gabrielius Landsbergis, the foreign minister of Lithuania, which borders the Russian exclave of Kaliningrad, told POLITICO.
The EU’s €50 billion comes from its central budget, and while that scarcely makes a mark on the €1.074 trillion the bloc has in its coffers over a seven-year period, finding spare cash in a pot meant for everything from subsidizing farmers to building roads, is notoriously difficult.
“Everyone realizes that €50 billion is not enough,” said Johan Van Overtveldt, a Belgian conservative who chairs the European Parliament’s Budget Committee. “Europe realizes that it needs to step up its efforts.” And by that, he means finding money from elsewhere.
World Bank estimates put Ukraine’s long-term needs for reconstruction at $411 billion.