The EU countries are discussing a $1.5 billion monthly financial aid to be provided to Ukraine. Thus the support to Ukraine in 2023 is expected to reach $18 billion.
The President of the European Commission Ursula von der Leyen stated this at the opening of the International Expert Conference on the Restoration, Reconstruction and Modernization of Ukraine in Berlin on October 25.
The President of the European Commission reminded that Ukraine needed about $3-5 billion per month to cover current budget expenses, particularly salaries for doctors, teachers and military.
“Ukraine needs reliable support. The EU is ready to take it on, and I am working with the member states to ensure that the EU can provide Ukraine with up to $1.5 billion in support for each month of the war. We are talking about $18 billion in 2023,” she said.
EU’s “Marshall plan” to rebuild Ukraine
On October 25, before the start of the Berlin conference on the reconstruction of Ukraine, Commission President Ursula von der Leyen and German Chancellor Olaf Scholz called for the creation of a Marshall plan as the war-torn nation struggles with deteriorating economic conditions and limited financial assistance, Euroactive reported.
The Kyiv School of Economics‘ most current estimates indicate that the Russian invasion caused damages totaling more than $127 billion. Early in September, the World Bank, the EU Commission, and the Ukrainian government conducted a joint study and concluded that the cost of rebuilding would be around $349 billion.
Cost of rebuilding should be $349 billion – World Bank and EU joint study
At the “International Expert Conference on the Recovery, Reconstruction and Modernization of Ukraine,” which is being organized by the EU Commission and the German government, which is currently in charge of the G7 presidency, experts from Ukraine, G7 governments, and EU institutions will talk about where the funds should come from and how it can be used most effectively.
“It’s about nothing less than developing a new Marshall plan for the twenty-first century,” Ursula von der Leyen said alluding to the US-led initiative that assisted in reviving the European economy following World War II.
The two EU leaders added that as Ukraine is currently a candidate for membership and is acting to protect EU interests, aiding Ukraine is in the EU’s best interest. However, up until now, the EU has shown that it is quite slow to provide financial assistance to Ukraine.
Only €6 billion of the up to €9 billion in macro financial aid promised in May 2022 has been distributed by the EU member states to date.
The Ukrainian state has started to monetize its debt in order to maintain its financial stability and continue paying its military operations.
US provided Ukraine the largest financial aid
According to the Kiel Institute for the World Economy, the US had given the Ukrainian government €52.3 billion in assistance as of 3 October, while the EU and its member states contributed a total of €29.2 billion.
It has not gone unnoticed that European support is moving slowly. The German Marshall Fund contends in a research on Ukraine’s reconstruction that the EU Commission shouldn’t be the primary organization in charge of the project “since Brussels has neither the required political nor the financial heft.”
Instead, it contends that the G7 nations should take the lead in the recovery and that an American should serve as the platform’s initial coordinator. This analysis suggests that the EU’s involvement will only become more significant as Ukraine draws closer to membership.
The Berlin conference will also address how to prevent corruption and how the reconstruction may be used to modernize the Ukrainian sector in addition to problems regarding the structure of the restoration effort.