By 2026, Germany aims to reduce its aid to Ukraine, relying on sources other than the federal budget. Capital gains from frozen Russian assets could be one such source.
It came as a shock to Ukraine and to all those who want to support Kyiv unconditionally: the German government apparently wants to end financial aid for military aid to Ukraine from the federal budget after next year and instead tap into an international pot.
The reason for this is the extremely difficult budgetary situation in which the governing coalition of the center-left Social Democratic Party (SPD), the Green Party, and the neoliberal Free Democratic Party (FDP) is struggling to make ends meet.
Finance Minister Christian Lindner (FDP) wrote in a letter to Defense Minister Boris Pistorius (SPD) and Foreign Minister Annalena Baerbock (Greens) that “new measures” involving payment obligations may only be agreed upon if “financing has been secured.”
The German government has allocated €7.5 billion ($8.3 billion) in the 2024 budget for Ukraine, and another €4 billion ($4.4 billion) for 2025. After that, no further money will be earmarked for Ukraine in Germany’s federal budget.
At that point, the money is expected to come from a new source, agreed upon by the representatives of the seven major Western industrialized nations, the G7, in June. At their summit meeting they declared that by the end of the year, around €50 billion ($55 billion) is supposed to have been raised in “additional funds,” not as a substitute for national contributions.
The interest for these loans are to be paid for by, among other things, interest earnings from frozen Russian assets. However, it is still unclear if and when such revenues will accrue, how much they will be and whether they can be used in this manner. International negotiations on this are ongoing. The G7 had explicitly stated that these funds were not going to substitute national contributions to Ukraine’s struggle.
Criticism from all sides
Ukraine’s ambassador to Germany, Oleksii Makeiev, was quick to issue an urgent warning to the German government against cutting financial support to his country. “Cutting military aid to Ukraine means jeopardizing Europe’s security,” he wrote on X. “That would be fatal and must be avoided. The funds are there, it’s a question of political will.”
Criticism showered down on the government. Representatives of the largest opposition party, the conservative Christian Democratic Union (CDU), accused the German government of abandoning Ukraine. The opposition party is also in favor of using Russian assets – not as a substitute for German funds, but in addition to them.
Critical voices are even coming from within the governing coalition. Michael Roth (SPD), chairman of the Foreign Affairs Committee in the Bundestag, said that Germany cannot make its support dependent on the budget situation. “We must not sacrifice the fate of Ukraine on the altar of the debt brake,” he said in reference to a provision in the German constitution limiting public debt.
Green Party co-leader Omid Nouripour said in an interview with public broadcaster ARD: “This is not a good signal, certainly not for Ukraine and certainly not for our partner states, which are all involved.”
Marie-Agnes Strack-Zimmermann from the FDP, one of the most vehement supporters of military and financial aid to Ukraine and chair of the Defense Committee in the European Parliament, echoed the same sentiment. But she also held her partners accountable. She wrote on X that aid to Ukraine still needs to be stepped up. “But this is only possible together with our European partners, from whom we are demanding just as much commitment as before.”
Fear ahead of the state elections?
The German government wants to limit aid to Ukraine not only because of the tight budget. In September, state elections will be held in three eastern German states: Saxony, Thuringia and Brandenburg. Polls predict good results for the far-right Alternative for Germany (AfD) and the populist Sahra Wagenknecht Alliance (BSW), who want to end support for Ukraine and are in favor of reconciliation with Russia.
After the initial uproar over cutting aid to Ukraine, the German government is now trying to mitigate the damage: “The chancellor will keep his word that support for Ukraine will continue for as long as necessary and that no one, especially not the Russian president, can count on us letting up,” said government spokesman Wolfgang Büchner.
However, he did not deny that a shift from the federal budget to international sources was being considered.
https://www.dw.com/en/germany-ukraine-military-aid-2026/a-69984998
Vacancy of shopping and entertainment centers in Kiev decreased from 16.3% in 2023 to 15.2% at the end of the first half of 2024, said the head of legal consulting department of UTG Konstantin Oleynik.
“At the end of last year, about 21.4% of space was de facto vacant, due to the closure of foreign department stores (IKEA, Inditex, H&M and others). The actual vacancy rate was 16.3%. Thanks to the opening of most foreign operators, the vacancy gap with actually closed stores has narrowed,” he said.
According to UTG research, the vacancy rate is higher in regional (18.4%) and district (17%) shopping centers, lower in specialized (9.8%) and district (7%) shopping centers.
The expert noted the trend of decreasing effective demand of the population. The growth of household expenditures on housing and utilities services and CP payment continues (at the end of 2023 this category was 18.8% and with the growth of electricity tariffs there is further growth), health care (4.7%), transportation (4.8%), communication (4.3%), education (3.6%). Cumulatively, these categories drain 36.1% from the family budget. Food and alcohol accumulate 43.4% of expenditures. The share of retail network (clothing and footwear, electronics, household goods, cafes and restaurants, entertainment, other goods) in the structure of expenditures is only 16.0% per family ($73.4 or 2,684.5 UAH per month). Inflation and rapid price growth lead to a reduction in individual savings (about 4.4% in 2023).
In general, general savings and cost rationalization are recorded, for the mall market this entails a decrease in attendance and adjustment of rental rates. Compared to pre-war rates, rates for some product groups have halved or more.
“Food supermarkets have become one of the few operators able to generate sustainable footfall and pay moderately high rental rates ($10-20/sq. m in August 2024), while most department stores, entertainment (cinemas, DDCs), fitness centers are aiming for a minimum fixed payment (around $1/sqm) with an additional RTO (fixed payments of $2 to $12/sqm prevailed before the war), shifting the risk to the developer,” Oleynik reported.
According to UTG research, taking into account the current income level of the population, solvent demand is able to ensure successful functioning for 2 million 313 thousand sq. m. in the capital, and in the second quarter of 2024 there were already 2 million 457 thousand sq. m. in operation.
Competition continues to intensify: large shopping centers with a total area of 250 thousand square meters are declared for opening in 2024-2025. Among them are Ocean Mall (GLA 110 thousand sq. m), Lukiyanivka (47 thousand sq. m), White Lines shopping mall (28 thousand sq. m), New Ray (34.5 thousand sq. m), April Mall (36.5 thousand sq. m), BalticSky (20 thousand sq. m). There is a possibility that most of the announced openings may be postponed to a later period.
According to Oleinik’s estimation, the commissioning of the declared projects will bring about a surplus of retail space and gradual redistribution of consumer flows between objects, vacancy growth and downward correction of rental rates. At the existing level of incomes and expenditures of the population, the vacancy rate may reach 17% in 2025.
UTG was established in 2001. It has developed more than 1300 real estate concepts. During the years of work with the company’s participation 4.7 million square meters of commercial space in Ukraine have been leased out.
KYIV, REAL ESTATE, UTG, Vacancy Shopping and Entertainment Center
Naftogaz-Energoservice is holding a tender for the purchase of voluntary medical insurance (VMI) services. According to the announcement in the electronic state procurement system Prozorro, the expected cost of purchasing the services is UAH 593.645 thousand.
Documents are accepted until August 22
The winner of a similar tender a year earlier was IC Salamandra
JSC OTP BANK has received a second grant from the USAID Business Resilience Investment Project to expand access to finance for micro, small and medium-sized enterprises. More than 100 companies have already been financed under the first tranche. The new tranche of $2.76 million will bring the total grant amount to $4 million. The funds will be used to offset part of the interest rate for borrowing companies.
The grant program stipulates that the bank will lend to businesses at an interest rate of 9.9% per annum in the first year of the loan agreement. The difference between the rate for clients and the market rate will be compensated by grant funds. In the second and subsequent years, clients will pay interest on the use of credit funds at the rate of UIRD3m + 5% per annum (UIRD3m is the Ukrainian index of rates for three-month retail deposits).
Micro, small and medium-sized enterprises with an annual income of up to EUR 50 million and up to 250 employees belonging to one of the following target groups will be able to receive financing on favorable terms from OTP Bank
– relocated businesses or those affected by military operations
– companies belonging to critical economic sectors (agricultural production, production of building materials, electrical devices, transportation, logistics, processing, etc;)
– companies co-owned by women.
“The project started cooperation with OTP Bank under this grant program in September 2023. The results of our partnership are significant. During this time, more than 100 companies have received financing from the bank for almost UAH 550 million at a compensated interest rate. The objectives of the second stage of the program are even more ambitious – to provide access to financing and compensate the interest rate to more than 330 enterprises. We believe that such business support will contribute to the recovery of Ukraine’s economy, which is suffering tremendously from the war,” said Raphael Jabba, USAID Business Resilience Investment Project Chief of Party.
The maximum loan amount that a company or a united group of companies can receive under this program is UAH 20 million, and the minimum is UAH 1 million.
The grant program also applies to factoring agreements, under which the bank’s clients can receive up to 90% of the cost of supplies in the amount of UAH 2 million to UAH 20 million.
Special conditions will apply to agricultural producers if they use the funds received under the grant program to purchase products from OTP Agro Factory’s partners.
“The cooperation between OTP Bank and the USAID Business Sustainability Investment Project continues, and it means a lot to us. The bank has proven to be a reliable and efficient partner, time-tested, and one that fulfills its obligations flawlessly. The grant is extremely important for Ukraine and its economy, which is under incredible pressure in the context of the war. Thanks to this program, businesses in critical industries will receive much-needed support, companies affected by the war will be able to recover, and women entrepreneurs will receive an additional incentive to develop their business,” said Volodymyr Mudryi, CEO of OTP Bank.
During the first stage of the program, which began in 2023, more than 100 Ukrainian enterprises were provided with financing. Among them were companies from the agricultural sector, businesses dominated by women in the management team, as well as enterprises from critical sectors of the economy and those that were forced to relocate production due to the war. In addition, as part of the program, representatives of MSMEs used factoring services on favorable terms.
About the USAID Project “Invest for Business Resilience”
The USAID Investment for Business Resilience (IBR) Project is a five-year program implemented by DAI Global that supports systemic changes in Ukraine’s economy and increases the supply of financing available to Ukrainian businesses. The IBR project aims to transform the country’s financial sector into a well-functioning and competitive market that meets European Union standards and is integrated into international financial systems, while directly providing financing to businesses to ensure sustainable economic growth in Ukraine.
For more information on USAID IBR’s activities in Ukraine, please visit the USAID IBR Facebook page: https://www.facebook.com/IBRUAproject
About OTP BANK
JSC OTP BANK is one of the largest Ukrainian banks with foreign capital, which is a recognized leader in the country’s financial sector. It has been present on the market since 1998 and has a strong reputation as a socially responsible, reliable and stable structure offering European quality services to its customers. The bank provides a full range of financial services to corporate and private clients, as well as small and medium-sized businesses.
Since 2019, according to the decision of the NBU, OTP Bank has been included in the list of systemically important banks of Ukraine, which have a significant impact on the development of the country’s financial system.
In Ukraine, JSC OTP BANK is the flagship of the OTP banking group registered by the National Bank of Ukraine, which also includes OTP Capital AMC LLC, OTP Leasing LLC, Freefly non-state pension fund and OTP Pension open pension fund.
The consulting company of the Chairman of the Board of the Amber Business Association of Ukraine won
On Friday, 16.08.2024, an online auction was held for the sale of a special permit for the amber-bearing Polyana field (geological exploration with pilot industrial development and further extraction, for 5 years) with an area of 44.63 hectares in Rivne region.
The bidding started at UAH 4,641,520. Three bidders competed for the lot, with the final bids as follows:
Mykola Kotniuk is the head of the Amber Business Association of Ukraine, which unites 24 participants in the amber industry.
Is the Polyana site worth the UAH 91 million investment in a 5-year special permit? NADRA.INFO asked the winner of the auction.
“Our specialists will conduct a survey of the site, analyze the available geological information, and obtain the conclusions of the legal department on the possibility of obtaining a temporary land plot. After that, the investors will make the final decision on the payment for the lot,” said Mykola Kotnyuk.
If the winner does not buy the special permit, he will lose UAH 2 million of the guarantee fee, and the right to buy it will go to Com Resource LLC.
It should be noted that this was the second attempt by the State Service of Geology and Subsoil of Ukraine to find an investor for the Polyana field. At an auction in July, the lot was valued at UAH 35 million, but the special permit remained unacquired. Then, another company of Mykola Kotnyuk, Ukrainian Amber LLC, offered UAH 22,000,001 for the Polyana plot.
Kom Resurs LLC also participated in the first auction, valuing the lot at UAH 4,710,000. In July, the company was solely controlled by Ivan Debeliy (Antonov, Kryshchenko and Vertyporokh became owners of the company in August.
AMBER, AUCTION, State Service of Geology and Mineral Resources
In Ukraine on Monday, August 19, without precipitation; only in the afternoon in the western regions in some places short-term rain, thunderstorms, reports Ukrhydrometcenter.
The wind is predominantly southeastern, 5-10 m/s.
The temperature at night 15-20 °, on the seashore up to 23 °; in the afternoon 29-34 °, in the southern and central regions of strong heat 35-37 °; in the Carpathians 23-28 °.
In Kiev on Monday without precipitation. No precipitation. The wind is predominantly southeastern, 5-10 m/s. The temperature at night is 18-20°, during the day 32-34°.
According to the Central Geophysical Observatory named after Boris Sreznevsky. Borys Sreznevsky in Kiev on August 19, the highest daytime temperature was 37.8 in 1946, the lowest nighttime temperature was 7.4 in 1893.
Tuesday, August 20, in Ukraine without precipitation; only in the western regions, in the afternoon and in Zhytomyr region, in some places short-term rain, thunderstorm.
Wind of variable directions, 3-5 m/s.
The temperature at night 15-20°, on the seashore up to 23°; in the afternoon strong heat 35-38°, in the western regions 30-34°, in some places 25-30°.
In Kiev on Tuesday without precipitation. Wind of variable directions, 3-5 m/s. The temperature at night is 18-20 °, in the daytime strong heat – 35 °.
