Ukraine has received a vital $61 billion in US aid, but it still needs a medium-term financing plan to counter Russian onslaught, and central to that plan is leveraging Russian frozen assets. finds Reuters.
The publication notes that, combined with the commitments of other countries, the latest US aid package should be provided to Kyiv by the end of next year. But at the end of 2025, Ukraine may run out of weapons again.
"A multi-year financing plan, on the contrary, would have several advantages. First of all, it will provide some insurance against US political fluctuations. In addition, it would raise the morale of Ukrainians and give Western arms manufacturers more confidence in increasing production," — notes the publication.
At the same time, Russian President Vladimir Putin's calculations may also change if he decides that Ukraine can hold out for many more years.
Reuters believes Ukraine won't be able to win back much territory, but it may be able to negotiate peace from a stronger position — or freeze the conflict like North and South Korea.
"How much Kyiv will need in the future depends on what kind of war it will wage. A defensive campaign will cost less than an attempt to expel Russia from large territories. But given that the Kremlin is ramping up its military spending, Ukraine in the future is likely to need at least as much per year as the 88 billion euros allocated by its allies for 2023."
The publication notes that the main way to get more money for Ukraine is to mobilize Russian assets frozen in the West worth more than 300 billion dollars. Ideas include confiscating the assets, using them to back a loan that Western countries will extend to Ukraine, or transferring the interest they earn to Kyiv.
So, if Western countries guarantee the payment of interest on assets for ten years, they will be able to collect 30 to 40 billion euros. However, this, although it will help, will not change the situation, as it will make it possible to finance Ukraine for at least six months.
"However, getting 320 billion dollars for Kyiv is a completely different matter. This will fund the war until at least the end of 2028. If the warring parties stop or freeze the conflict by this time, Ukraine will be able to use part of the money to restore its economy, which, according to the World Bank, will cost 486 billion dollars.
Confiscation of Russian assets for Ukraine
In response to Russia's war against Ukraine, the United States and its allies have blocked about $300 billion in Russian assets in the West, although most of them are in European, not American, financial institutions.
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