G7 finance ministers mobilize almost $20 billion for Ukraine

Finance ministers from the Group of Seven (G7) wealthy democracies concluded a summit in Germany on Friday by announcing a commitment of $19.8 billion (€18.7 billion) in financial support to prop up Ukraine's budget.

Russia's war on Ukraine has severely affected Kyiv's ability to collect taxes, and it is estimated the government will need €15 billion over the next three months to continue functioning.

What will the money be used for?

Ukraine would use the support, for example, to pay salaries of public servants and maintain public works as the war continues. 

In a communique, the G7 finance ministers said the aim was to "help Ukraine close its financing gap and continue ensuring the delivery of basic services to the Ukrainian people."

German Finance Minister Christian Lindner, who hosted the summit as Germany holds the rotating G7 presidency, said Ukraine's financial situation should not affect its ability to defend itself from Russia's invasion.

"We will stand by Ukraine during this war and after that and are ready to do more," Lindner said. 

How the G7 plans to support Ukraine in the future

On Thursday, Germany announced it would contribute €1 billion of support in grants as part of the G7 package. 

However, Lindner ruled out the idea of setting up a joint EU borrowing scheme to cover the costs of rebuilding Ukraine after the war, an idea that had been floated by top European officials earlier this week.

"There is a time, sooner or later, when we will have to look at funding on a European scale as we did for COVID," EU Commission Vice President Frans Timmermans said in Brussels on Wednesday.

The idea was envisioned as similar to the EU's €800-billion post-pandemic recovery fund called "Next Generation," which is being financed by pooling debt.

"If there is any consideration of doing something like 'Next Generation EU' again, then the answer would have to be no. This was a one-off opportunity," Lindner said.

The EU Commission has, however, proposed €9 billion in "macro-financial assistance" loans for Ukraine that aim to "sustain basic services, address humanitarian needs and fix the most essential destroyed infrastructure."

The G7 communique also said other planned support is intended for "Ukrainian state-owned enterprises and the private sector through the European Bank for Reconstruction and Development and the International Finance Corporation" amounting to $3.4 billion, reports DW.