Bloomberg: Ukraine’s allies are strapped for cash and arms supplies are at risk

Ukraine’s military supplies for next year are at risk because some allies are struggling to secure funding and others balk at increasing financing to help Kyiv, according to people familiar with the matter, Bloomberg writes.

Ukraine is struggling to convince Western allies to make good on their promises, the people said, asking not to be named discussing private conversations. Moscow’s war machine, in contrast, is outpacing Kyiv’s ability to acquire badly needed ammunition, missiles and other hardware to fend off attacks.

Much of Ukraine’s military support for 2025 is linked to a Group of Seven deal to provide $50 billion in loans from profits generated by frozen Russian central bank assets.

Allies are still haggling over the final details of that deal and the US is seeking assurances that Hungary won’t block European Union measures. The final figure could fall short if an arrangement isn’t found.

But even if an agreement is reached, $50 billion is still not enough to support Ukraine’s needs through another year of war — and allies will need to look beyond that funding framework, according to the people.

The looming cash crunch among allies comes at a dangerous moment for Ukraine and could force Kyiv into negotiations from a position of weakness, the people said.

Ukraine’s European allies are facing their own constraints on the fiscal front. Chancellor Olaf Scholz’s government is hamstrung by constitutional debt restrictions — and has whittled direct funding for Kyiv. France has a new government after a tumultuous election season and is under pressure from the EU to narrow its deficit. In Italy, Prime Minister Giorgia Meloni’s fractious coalition may be tied down on spending pledges.

Tangible negotiations in Brussels on a new EU budget – along with any talk of joint borrowing to ramp up defense spending with hundreds of billions of euros – will likely have to wait until after the German election, the people said.

Assistance from the UK, a stalwart ally that’s often been first to provide advanced weapons, has also appeared to tail off lately, according to an official familiar with the matter. Prime Minister Keir Starmer has told his voters they face tough times ahead as he seeks to curb spending, although he also told the United Nations Wednesday that Britain’s support for Ukraine is “ironclad.”

To be sure, pledges from NATO allies continue to register. Biden announced nearly $8 billion in new military assistance for Ukraine on Thursday and plans to convene a leader-level meeting of key allies to coordinate additional support when he visits Germany next month.

…The ‘high relations’ among Ukraine's European allies – Italian Prime Minister Meloni very expressively looks at Hungarian Prime Minister Orban:

Photo: Reuters