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
The Ministry of Economy has registered a representative office of the Japan External Trade Organization (JETRO), which will soon open in Ukraine.
“The opening of the JETRO office in Ukraine is a strategic step, the result of productive negotiations with the government of Japan, and marks the beginning of a new era of cooperation between our two countries,” Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine, was quoted on the ministry’s website on Tuesday.
“We strive to create an attractive business environment that will attract Japanese investment and promote a strong partnership between Ukrainian and Japanese companies,” he added.
According to him, Japan plans to provide $188 million for Ukraine’s economic recovery projects, focusing on energy, utilities, critical infrastructure, humanitarian demining, and business support.
“The establishment of the JETRO office will accelerate the introduction of Japanese technologies in our country and open new markets for Japanese brand products to be manufactured in Ukraine,” Kachka said.
JETRO (Japan External Trade Organization) is an office of the Japan External Trade Organization, an independent administrative body under the auspices of the Ministry of Economy, Trade and Industry of Japan, established to promote trade and economic cooperation with other countries.
USAID’s Urozhay program has announced the launch of a tender for the supply of mobile grain dryers for farmers in frontline regions to store grain in the 2024 season, the donor organization reported on its Facebook page.
“Due to a lack of funds and access to quality drying equipment, many farmers leave part of their crops in the field unharvested until spring. This leads to a loss of quality and value,” USAID Urozhay noted.
The donor organization invited suppliers to register for a pre-application seminar by August 21. The seminar itself will take place on August 22. Proposals for the supply of mobile grain dryers must be sent no later than 18:00, September 5, 2024, to harvest.subcontracts@harvestukraine.com.
The requirements for suppliers can be found here: https://shorturl.at/O0ZiX.
Representatives of the U.S. Corporation for International Development (DFC) have started working in Ukraine on a permanent basis.
“The AmCham Ukraine team held a productive meeting with Caitlin Candee, Project Finance and Political Risk Insurance Specialist, and Anthony Pollak, Investment Advisor, from DFC, who are now represented in Ukraine on a permanent basis,” AmCham Ukraine said in a Facebook post.
According to Pollak’s LinkedIn profile, he has been working in Kyiv on behalf of DFC since July of this year, and a little earlier, in June 2024, he began representing the CrossBoundary group as an investment advisor in Kyiv.
In addition, DFC, the U.S. government’s development finance institution, the successor to OPIC, has launched a special website dedicated to its work in Ukraine. It is noted that before Russia’s full-scale invasion, DFC’s investments in Ukraine amounted to $800 million, but since the beginning of 2022, they have increased by $848 million, or more than doubled. Thus, DFC’s total portfolio as of August 12 was approximately $1.6 billion.
Source: https://interfax.com.ua/
Ukrnafta JSC together with the Come Back Alive Foundation have delivered 40 FN Minimi machine guns to the 82nd separate air assault brigade.
“This reliable and proven weapon is now helping the soldiers perform special combat missions. The company has allocated UAH 25.3 million for the purchase,” Ukrnafta CEO Sergiy Koretsky said on Facebook.
He also clarified that in 2023 alone, Ukrnafta allocated almost UAH 1.3 billion for the purchase of pickup trucks, armored vehicles, grenade launchers, drones and other equipment needed by the defenders.
“Ukrnafta is Ukraine’s largest oil producer and operator of a national network of gas stations.
In March 2024, the company took over the management of Glusco’s assets and operates a total of 545 filling stations – 460 owned and 85 managed.
The company is implementing a comprehensive program to restore operations and update the format of its filling stations. Since February 2023, Ukrnafta has been issuing its own fuel coupons and NAFTAKarta cards, which are sold to legal entities and individuals through Ukrnafta-Postach LLC.
Ukrnafta’s largest shareholder is Naftogaz of Ukraine with a 50%+1 share. In November 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer to the state a share of corporate rights of the company, which belonged to private owners and is currently managed by the Ministry of Defense.
In 2024, IMC Agro Holding will invest $12 million in grain carriers, Chairman of the Board of Directors Alex Lissitsa said in an interview with German radio deutschlandfunk.de.
“Things are much better now, especially because we have finally returned (to the de-occupied territories where the agricultural holding operates – IF-U). We are able to export. It is a huge advantage for us to export across the western border by rail. It used to be very difficult and expensive for us. Now everything is going well,” he said.
According to Lissitsa, the normalization of IMC’s operations after the de-occupation of the territories and the resumption of exports allowed the agricultural holding to resume investments in 2024.
“Now we have $12 million in investments in grain carriers (Pfeidewagen). We also have a number of other investments planned. Therefore, things are much better now than two years ago,” said the Chairman of the Board of Directors of IMC.
Commenting on the publication of his book “My Wild Nation. Ukraine on the Road to Freedom”, Mr. Lissitsa explained that the agricultural holding is currently working with the government to identify priorities for the economic recovery of Ukraine in the next few years.
He noted that only half of the decisions made under the Ukraine Facility program have been implemented. The issue is the need to take advantage of the opportunities in the agricultural sector during Ukraine’s integration into the European Union.
“There are many things that are a bit painful for us. For example, the use of all kinds of pesticides, the use of drones, and so on, where Ukrainian agriculture has already had a significant advantage. I think that for many people in Ukraine, this (integration – IF-U) will be painful, but nothing more. It is feasible. After all, we want it,” Lissitsa assured.
According to him, Ukraine’s “savagery” is not chaos or uncontrollability.
It is the unwavering will of the Ukrainian people to freedom and self-determination on the path to EU membership.
Speaking about the upcoming Independence Day, which will be celebrated for the third time during Russia’s full-scale invasion of Ukraine, Lissitsa clarified that there will be no celebrations in the country. However, Ukrainian President Volodymyr Zelenskyy has already initiated a meeting with farmers next week to discuss the current situation in the agricultural sector.
