PARIS (Reuters) – Ukraine’s financing needs after the Russian invasion will be massive and the European Union will have to come up with the money, European Commission Vice President Valdis Dombrovskis said on Friday.
Speaking after a meeting of European Union finance ministers and central bank governors, Dombrovskis said Ukraine was suffering from investor flight and its access to financial markets has been very problematic.
Also the country’s currency, the hryvnia, has come under pressure and central bank reserves were being depleted in market interventions.
“So it is clear that Ukraine’s financing needs will be massive, and we will need to match those financing needs,” Dombrovskis said.
The EU has recently agreed on 1.2 billion euros in macro-financial assistance emergency programme for Kyiv, of which the first half will be disbursed soon, but Dombrovskis said it was clear EU support would have to go far beyond this.
He said before Russia started amassing troops on the Ukrainian border, the estimated financing gap for Ukraine for this year was around 2.5 billion euros. This rose to 5 billion after the build-up of troops as investors fled expecting war.
“Now, the financing needs are off-the chart,” Dombrovskis said. “We cannot really estimate them, but we need to be ready to support Ukraine in every way we can.”
(Reporting by Jan Strupczewski and Leigh Thomas)
