The Ukrainian government may have to postpone the payment of salaries and pensions unless Western partners provide financial assistance quickly. This was stated by the Minister of Economic Affairs of Ukraine, Yulia Sviridenko Financial Times. “The support of partners is very important,” said Sviridenko. “We need it soon.”
There is talk of a financial aid package of 50 billion euros over four years within the EU, but Hungary is blocking this. On February 1, EU leaders will meet again to appease Hungary, but in the meantime plans are being made to transfer 20 billion euros to Kyiv outside the EU.
Svyrydenko hopes European leaders will reach an agreement and transfer the first part of the money in March, but he says it will not be enough. The Ukrainian economy has been hit hard by the war and cannot survive without foreign support. Since September, Kyiv has been trying to cut spending and several taxes have been increased to streamline its own finances.
According to Svyrydenko, the government's priority is to maintain defense spending and meet interest and principal payments. According to him, this means 'there is a huge risk of underfunding some social sectors'. Salary payments to 500,000 civil servants and 1.4 million teachers may be delayed, and 10 million pensioners may have to wait longer for their pensions.
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