European Court of Auditors warns of Ukraine's cash crunch
(Baonghean.vn) - The European Court of Auditors believes that supporting Kiev has increased the risk of Europe suffering financial losses.
The European Union's financial watchdog has warned that Ukraine may not be able to repay its loans, which could add tens of billions of euros to the bloc's debt. After lending Kiev 34 billion euros last year, the EU is proposing an additional 50 billion euros in grants and loans.
In a report on the EU's 2022 budget published on October 5, the European Court of Auditors noted that the bloc's potential future financial losses had increased from 204.9 billion euros ($216.8 billion) in 2021 to 248.3 billion euros ($262.8 billion) at the end of last year.
“Part of this increase is due to EU financial support for Ukraine,” the report said, noting that this support – excluding military aid – more than doubled last year, from 7 billion euros ($7.4 billion) to 16 billion euros ($16.9 billion).
The report warned that a number of additional long-term loans agreed last December, totalling 18 billion euros ($19 billion), would only increase Brussels' exposure to future losses.
Despite the risk that Ukraine may default on its debts, the European Commission is now working on another aid package for Ukraine worth 50 billion euros ($53 billion), of which 33 billion euros ($35 billion) would be in the form of long-term loans.
The European Commission's plans have met with fierce opposition from Hungary, whose government has also vetoed a €500 million arms package for Kiev. Last week, Hungary proposed splitting the €50 billion into two tranches, with the second half to be released after a reassessment of Ukraine's needs.
