US plans $1.5 billion-a-month aid to crisis-hit Ukraine, says report

The US is willing to support Ukraine’s finances with $1.5 billion a month in aid throughout the war against Russia and is pushing its European allies to commit to similar amounts, according to people familiar with the matter.

The US administration, which signed off last week on $4.5 billion in grants to cover the rest of the year, has held conversations with European Union officials and has pressed Europe to do more, the people said. 

With the EU haggling internally over the delivery of previous pledges, allies have been discussing a more regular mechanism to help keep Ukraine’s economy afloat as the war drags on, one of the people said. Officials have been warned that there would be growing demands in Congress, whose approval is required for longer-term support, for more burden sharing among allies, another person said. 

The International Monetary Fund has previously said Ukraine needs about $5 billion every month to cover essential services and keep its economy going. The country received about $2 billion in aid last month, down from $4.7 billion in August, Finance Minister Serhiy Marchenko said. 

Bloomberg reported in July that a number of allies had privately criticised the bloc for not delivering on its commitments of nearly €9 billion ($8.8 billion) and called on it at the time to do so urgently.

EU leaders are expected to discuss Kyiv’s financial requirements, which the draft budget for 2023 has placed at $38 billion, at a summit in the Czech Republic this week. 

Diplomats preparing the leaders’ meeting were told last week that expected funding levels from European nations would be on a similar scale to the monthly $1.5 billion the US was willing to provide, one of the people said. The funding was critical to covering essentials such as basic public expenditure, schools, hospitals and Ukraine’s electrical network, the person said.

Many senior EU officials have been very frustrated by the slow pace of the bloc’s decision-making over financial support for Kyiv, as well as lack of urgency among some governments toward the debate, especially as winter approaches.

Amid dispute among members over the details of the 9 billion euro-package, the bloc paid out €1 billion last summer, while another 5 billion euros have been approved but not yet delivered to Kyiv. The outstanding €3 billion euros remain stuck over issues including whether the aid should be in the form of grants or loans, and how to structure guarantees.