Politico: The EU has prepared three options for financial support for Ukraine next year

The European Commission has prepared three options for how the European Union will provide financial support to Ukraine in 2023. In total, the EU plans to allocate about €18 billion.

Politico writes about this with reference to its own sources.

“Ukraine will continue to have high short-term financing needs for the foreseeable future. That is why it is important that additional EU support is mobilized as soon as possible and provided on a regular and predictable basis,” the document reads.

Funds from the European Union plan to cover about half of the deficit of the Ukrainian state budget, which will amount to $38-40 billion.

The first option, which the European Commission says is the most profitable, is to borrow money against the so-called “safety margin”, or the difference between the maximum amount the bloc can raise from EU member states and the EUʼs actual spending. This requires the consent of all EU countries and the European Parliament, as well as changes to EU regulations.

The second option is for countries to provide budgetary guarantees to the European Commission. But now they will have to cover 100% of the amount, instead of 61%, since there is no “other budget coverage” left in the EU budget.

The third option is like the second, but without national guarantees. In this case, in the event of a shortage of funds, the European Commission will have to cut back the planned EU spending and borrow and lend on a reverse basis.

Payments there are planned to be made quarterly starting in January.

• On October 31, the Cabinet of Ministers approved the draft budget for 2023 for the second reading, taking into account the proposals of lawmakers. Budget 2023 is planned taking into account 1.3 trillion hryvnias of income. Thanks to adjusted macro indicators and tax changes, the Cabinet of Ministers proposes to increase the revenue part by more than 50 billion hryvnias. Expenses will amount to 2.6 trillion hryvnias.
• The US is ready to allocate $1.5 billion every month until the end of the war to support Ukraineʼs economy and calls on the EU to take the same steps.