With economic declines worsening amid Russian infrastructure attacks, donors reportedly may need to give an extra $2bn monthly
US braces allies for higher Ukraine costs – WaPo
© Getty Images / Chris McGrath
Washington is reportedly bracing its European allies for “worst-case scenarios” in Ukraine, suggesting that Kiev may need its donors to pony up an additional $2 billion a month as Russian attacks on key infrastructure cripple the former Soviet republic’s economy.
The cost warning reflects fears that Ukraine’s economy may contract by an additional 5-9% in 2023 after taking a 33% hit this year, the Washington Post reported on Thursday. There are also concerns that if Moscow’s attacks intensify, a surge in refugees fleeing the country could crash Ukraine’s currency, leaving the government in a “doomsday scenario” in which it can’t pay for critical imports or meet its foreign debt obligations.
“What do you do when you can’t heat your house, you can’t run your shops, factories or plants, and your economy is not working?” Oleg Ustenko, an economic adviser to President Vladimir Zelensky, told the Post. “We are going to be requiring more financial assistance, and [Russian President Vladimir] Putin is doing this to destroy unity among allies.”
Germany spending $500 billion to ‘keep the lights on’ – mediaREAD MORE: Germany spending $500 billion to ‘keep the lights on’ – media
Europe is already suffering an energy crisis and economic turmoil amid the Russia-Ukraine conflict. The US-led sanctions campaign to punish and isolate Moscow has sparked soaring inflation and energy shortages. Germany, for instance, has spent nearly $500 billion to “keep the lights on” since the conflict began in February, cutting off its imports of Russian energy, Reuters reported on Thursday.
Zelensky’s government expected to need at least $55 billion in foreign financial aid next year to meet basic expenses, the WaPo reported. An extra $2 billion monthly would push that total to $79 billion. To put that in perspective, Ukraine’s entire state budget was less than $48 billion in 2021.
So far, the US and the European Union have pledged to send more than $30 billion to Ukraine next year, not counting the massive military aid that they’re also providing. Beyond the additional government funding that Kiev will seek, advisers to Zelensky have weighed asking Western leaders to finance direct cash payments to Ukrainian citizens, at a cost of $12 billion, the Post said.
READ MORE: Putin accuses EU of being a doormat for US
Jacob Kirkegaard, a senior fellow at the German Marshall Fund think tank in Washington, argued that the West needs to give more money to keep Zelensky’s government financially afloat. However, he added, “I don’t know if the will is there.”
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Ecuadorian voters have rejected a proposal to permit the return of US military bases, according to preliminary referendum results.
Ecuadorians went to the ballot box on Sunday to decide whether US forces should again operate from local facilities. The nation had banned foreign bases in 2008 amid concerns over sovereignty.
With three-quarters of ballots counted, about 60% voted ‘no’ to the plan advanced by President Daniel Noboa, a close ally of US President Donald Trump and a supporter of US military operations in the Caribbean and near Venezuela.
The result blocks any US effort to return to the Manta airbase on the Pacific coast, which once served as a platform for Washington’s regional military operations.
The referendum also asked voters whether to end public funding for political parties, reduce the number of lawmakers, and create an elected body to draft a constitution.....more below
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The Jewish state says the incident in southern Lebanon was due to poor weather conditions, with no casualties reported.
UN peacekeepers stationed in southern Lebanon have accused Israel of firing on one of their patrols, criticizing the country for its “aggressive behavior.” Israel has acknowledged that the incident occurred, but said it was not intentional and was due to poor weather conditions.
In a statement on Sunday, the United Nations Interim Force in Lebanon (UNIFIL) said the Israel Defense Forces (IDF) fired on personnel from a Merkava tank.
It called the incident “a serious violation” of the ceasefire deal between Israel and Lebanon that ended the 2006 war, stressing that it was not the first attack of this kind. “Yet again, we call on the IDF to cease any aggressive behavior and attacks on or near peacekeepers, who are working to support the return to the stability that both Israel and Lebanon say they seek.”.... more below
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Iran’s largest credit institution has gone into administration amid the government’s continued push to reform the country’s banking and financial system.
The Central Bank of Iran (CBI) said on Sunday that it had appointed a team of three administrators to restructure the Melal Credit Institution after the lender accumulated a loss of 650 trillion rials ($590 million)
Head of CBI’s regulatory and oversight department Farshad Mohammadpour said the Melal Institution had an asset–liability mismatch of 450 trillion rials and its capital adequacy ratio was minus 41%.
Mohammadpour said that administrators are expected to restructure the Melal Institution in the next six months, mainly by selling off its non-banking assets, properties and affiliated enterprises to pay down its debts.
CBI’s decision about Melal Institution comes three weeks after the lender declared Bank Ayandeh, one of Iran's largest private banks, insolvent and transferred its assets and staff to the state-run Bank ...
