According to the Wall Street Journal, Ukraine has been forced to print money in order to pay its soldiers fighting against Russia because Western financial aid is slow to arrive.
Ukrainian Finance Minister Sergey Marchenko told the US outlet on Friday that it’s “a constant headache”He must continue to balance the costs of conflict with the higher tax revenue in an economy that has been ravaged by nearly half a decade of fighting.
Minister said that with 60% of budget going to fighting, he must cut unnecessary expenses. But it’s still not enough, as tax revenues only cover 40% of government spending, the WSJ reports.
The Kiev authorities stated that they would need $5 billion per month in order to manage the country. They also said that without Western aid, it was impossible to sustain themselves. The journal reports that the foreign backing for Ukraine has been sending loans and grants to Ukraine slower than anticipated.
For example, the EU has so far provided only €1 billion out of €9 billion it promised to Kiev, with Germany resisting the idea of offering low-interest loans backed by guarantees from the bloc’s member states.
Marchenko claims that a large part of his work time is spent convincing Western governments to take action faster. “Without this money, the war will last longer and it will damage economies more,”He elaborated.
Rostislav Shurma was an economist for President Vladimir Zelensky. He described the current situation as harsher.
Kiev would behave as slow-moving towards the West if they did. “the Russians would be at the Polish border by now,”He told the WSJ.
“They don’t feel the war. That’s the problem. The only thing they feel in the EU is high prices,”Shurma spoke.
Because of the shortage in funds, the Ukrainian Central Bank cannot print money more to help the government pay for troops’ salaries and buy arms and ammunition to continue fighting.
This approach has been weakening Ukraine’s national currency, the hryvnia, which has already lost 30% since the launch of the Russian military operation in Ukraine, prompting a major spike in inflation.
This is the sacrifice Marchenko is prepared to make. “we have to worry about winning the war. It is better to risk high inflation than not to pay soldiers’ salaries.”
He said that conflict could be extended, so this should be taken into consideration. “This is a war of attrition. These terms are essential to understand 2022/2023. It’s a marathon.”
Sergey Kiriyenko (the deputy head of Russia’s administration) accused Kiev authorities of selling their people in order to support NATO.
“NATO will gladly fight against Russia ‘to the last Ukrainian’ as they say themselves without hesitance. Is it possible? They don’t feel sorry about it,” Kiriyenko said.