Ukraine’s Debt – an instrument of pressure and spoliation in the hands of creditors

Ukraine’s internal and external public debt has increased by 60% between early 2022 and end of November 2024, reports ‘The Counter Punch’.

It amounted to just under USD 100 billion before the invasion and reached almost USD 160 billion by the end of 2024, including USD 45 billion of internal public debt. Creditors with whom Ukraine’s debt has most increased are the European Union, the World Bank and the IMF. Read the box to learn more about Ukraine’s debt before 2022.

Ukraine’s debt to the EU has multiplied more than eight times. From USD 5 billion in early 2022 it rose to USD 43 billion at the end of 2024. If we add Ukraine’s debt to the European Investment Bank (EIB) and to the European Bank for Reconstruction and Development (EBRD), it reaches USD 47 billion.

This is the first point to be stressed: the EU’s financial aid comes as loans not as grants. Consequently, the EU is owed more and more, which gives it significant power over the Kyiv government. The EU’s credit policy is perverse: repayment will not start before several years. In exchange for loans, the EU demands that Ukraine adapts its legislation to the European treaties, which all favour the private sector, that it opens its procurements to private competition… The major European private corporations are eager to reap the benefits of Ukraine’s integration into the large European market at a time when it will be in a very weak position and there will be major contracts for reconstruction to be had.

Ukraine’s debt to the World Bank has more than tripled, rising from USD 6.2 billion to 20 billion.

Ukraine’s debt to the IMF between early 2022 and the end of November 2024 went from USD 14 to 17.6 billion. It is worth emphasizing that both the IMF and the WB continue to demand repayments, despite the war.

Furthermore, the IMF practises abusive interest rates of up to 8 %. Ukraine reimbursed USD 2.4 billion to the IMF in 2022, 3.4 billion in 2023 and 3.1 billion in 2024. In other words, the IMF collected almost USD 9 billion off the back of the Ukrainians over three years of war!

Ukraine’s external public debt which comes to a little over USD 115 billion is distributed as follows: just under USD 50 billion owed to the EU, 20 billion to the World Bank, 18 billion to the IMF, 5.2 billion to Canada, 1 billion to Japan and 20 billion US dollars owed to private creditors on the financial markets.

In 2024, the EU, the United States and other G7 members agreed on the new aid plan for Ukraine. Within this framework, the EU adopted a plan amounting to up to 50 billion euros for the period 2024 to 2027. The plan adopted provides for a total disbursement of 38.27 billion euros between now and the end of 2027. Most of this (33 billion, that is 85 %) is in the form of debts that will have to be repaid. Donations only account for 5.27 billion euros, i.e. 15%. The donations part probably corresponds to the amount seized by the European Commission on the revenue from frozen Russian assets, mainly in Brussels. In the course of the year 2024, 12.4 billion was paid.

We have to be aware of the fact that Zelensky’s government does not wish the Ukrainian debt to be cancelled. As a good neoliberal, he is convinced that Ukraine has to be credible to private creditors.

Instead of trying to finance war and reconstruction expenses by having the rich Ukrainian capitalists, Ukrainian and foreign companies pay, he prefers to impose maximum taxation on the popular classes as recommended by the IMF and the World Bank. High incomes are spared, the assets of the richest remain untouched. Thus the rich, who manage to evade enrolment in the army, can heap up wealth while the popular classes make huge sacrifices.

Collective EU and EU Member State support to Ukraine – close to $73 billion in financial and budgetary support and in humanitarian and emergency assistance. This support is as essential as military assistance.

• Over $52 billion in military assistance – ranging from ammunition to air-defense systems, Leopard tanks, and fighter jets. This includes an unprecedented $6.6 billion from the “European Peace Facility,” in addition to bilateral contributions from our Member States;
• On top of that, in March 2024, the Council established a dedicated Ukraine Assistance Fund worth $5.4 billion;
• EU support also includes $2.2 billion for the joint procurement and delivery of up to an additional one million rounds of artillery ammunition, and an additional $535 million to boost EU defense industry capacities in ammunition production;
• The EU is today the largest military training provider to the Ukrainian armed forces – by the end of 2024, 70,000 Ukrainian military personnel will be trained under the EU’s $390 million Military Assistance Mission;
• $30.5 billion of financial assistance to Ukraine in 2022 and 2023;
• $21 billion of financial assistance mobilized from the Ukraine Facility in 2024;
• $13.2 billion of financial assistance directly from EU Member States in grants, loans, and guarantees;
• $3 billion in loans from the EIB and EBRD guaranteed by the EU budget;
• $4.8 billion in humanitarian aid, emergency assistance, budget support and crisis response.

…The European Union and the United States have sent huge amounts of money to Ukraine in order, as they said, to "inflict a strategic defeat on Russia." The money “has gone with the wind”, but there was no "defeat". Ukraine found itself under the weight of gigantic debts. An economic crisis began in Europe and the standard of living of citizens is falling. Europe is spending its money to build a castle on the sand. Monkey business…

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