Ukraine will not default but the financial situation is “catastrophic”, warns the EU ambassador in Kyiv


Ukraine is not likely to default on its external debt, but the financial situation inside the war-torn country is “catastrophic” and requires urgent foreign aid to offset a monthly budget shortfall worth of 5 billion euros, said the EU ambassador to the country. warned.

The funds are needed to keep the economy afloat and pay pensions, salaries and basic utilities, while Russian forces continue their brutal invasion.

“International financial aid comes from different sources. But it’s still not enough to bridge this gap,” Ambassador Matti Maasikas told Euronews during a recent visit to Brussels.

Last weekEU countries have agreed to release the first €1 billion tranche of the €9 billion package of financial aid the bloc pledged in May.

Member states still need to reach agreement on the remaining €8 billion.

The money is collected by the European Commission on the capital markets and then disbursed to Kyiv in the form of favorable long-term loans.

The interest charges resulting from the operation will be directly covered by the EU budget.

Italian newspaper Corriere Della Sera reported that Germany is blocking aid because it involves issuing new common EU debt.

A spokesperson for Germany’s permanent representation to the EU did not comment on the media reports. Officials in Brussels did not confirm the funding block, but said discussions over additional guarantees were still ongoing between capitals.

“The decision on the rest is awaited. The budget deficit is a reality,” Maasikas said. “I can only express my hope that talks between EU member states will move forward more quickly.”

Asked about the possibility of Ukraine defaulting on its loans, the ambassador said the prediction was not based on the country’s past or present economic situation.

“I don’t have the feeling. I think I would know if they were really on the brink [of default]”, he said. “But the situation is dire.”

“No shortcut to EU membership”

As the EU’s main point of contact in Kyiv, Maasikas played a leading role in Ukraine’s bid to join the bloc. He personally received the two-volume Membership Questionnaire from President Volodymyr Zelenskyy.

Following a positive assessment by the Commission and unanimous approval of the 27 EU leaders, Ukraine was granted candidate status, setting in motion a long, arduous and complex process of reforms and negotiations.

“Things could be done quite quickly. The speed with which the Ukrainians responded to the Commission’s questionnaire [broke] the European record,” said Maasikas.

“There can be no shortcuts or fast tracks to membership itself. The EU covers so many areas, and at the very heart of the EU is the single market. And the single market cannot work if in one part of it all the rules are not, the regulations, the standards are met,” he noted.

“So a very thorough job needs to be done by the Ukrainians.”

The Ambassador denied rumors that the questionnaire was mainly filled in by EU officials, rather than the Ukrainian government itself, and said the Association Agreement currently in place had helped speed up works.

“The EU opened the door, but to get there and get in through that door is more in the hands of the Ukrainians and they know it,” the envoy said.

“Ukraine, as a nation, has chosen the EU as its destiny and destination. The European Union currently symbolizes hope for Ukrainians. They are absolutely sincere in their pursuit.”

“Western weaponry makes the difference

Re the shocking lugubrious of Iryna Venediktova as attorney general, Maasikas said simply that she had been “a very good partner” in war crimes investigations.

Venediktova is accused of failing to eradicate pro-Russian activities within her organization.

“For us, the most important thing is that Ukrainian institutions continue to function and that everything is done according to Ukrainian law,” Maasikas remarked.

He also said that the country “firmly” supports President Zelensky and that a majority of citizens oppose any kind of concessions to obtain a ceasefire from the Kremlin.

The war has entered its fifth month no solution in sight. The fighting is now focused on Donbass, much of which is now under Russian control.

“What we hear from the front line is that the situation is very serious,” Maasikas said. “It’s an artillery war. Of course, the range matters, but also the amount of ammunition. Western artillery is starting to make a difference. The Russians have withdrawn much more.”

Asked when the conflict could end, the ambassador avoided giving a precise timetable but predicted: “the outcome will be decided on the battlefield”.

“If the shooting were to stop today, then the negotiation process would continue,” he said.

Maasikas wondered if the invasion could have been prevented if Kyiv had already received weapons last year, when the first signs of a Russian military build-up along the border, and if Western nations had imposed ” preventive sanctions” in the Kremlin once tensions began to rise.

“Would that have made a difference? That’s a really big discussion to have right now,” he said. “All we can say is that we must arm Ukraine now so that it can win the war.”


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