This year, Ukraine will cover the budget deficit mainly with the help of its international partners, but in the following years, the budget deficit of US$10-15 billion needed to rebuild the country could be covered by revenues from frozen assets of the Russian Federation.
Source: Rostyslav Shurma, Deputy Head of the President’s Office, at a discussion at Ukraine House in Davos; Interfax-Ukraine reports
Details: Ukraine needs about US$40 billion in external financing to cover the state budget deficit in 2024.
Quote: “We are absolutely confident that both packages [of aid – ed.] will be approved by the US and the EU. That is, 2024 will be covered… The question is what’s next… because we understand that, roughly speaking, a further US$10-15 billion will be needed.”
Shurma said this amount roughly corresponds to the income from frozen Russian assets, taking into account the market rates on treasury bills or bonds of AAA-rated issuers, which have risen to 4-5% per annum today.
“We are talking about figures between US$10-15 billion,” he clarified.
Shurma added that the issue of providing these funds to Ukraine is much easier to resolve legally than the issue of confiscating the Russian assets themselves.
Background: The West is open to the idea of confiscating US$300 billion in Russian assets to help Ukraine, but believes that this still requires reliable legal mechanisms to be found, and that even if mechanisms emerge, it will not be a panacea for Kyiv.
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