European Union to give Ukraine $54 billion

EU leaders have agreed to give Ukraine 50 billion euros ($54 million) to help its economy, which has been badly affected by the war. This happened after Hungary decided to no longer block the measure.

The help package is mostly loans that have to be paid back and some grants. It will be given over four years. It is not meant to pay for weapons, which will be covered by a different EU plan. Instead, it wants to make Ukraine’s economy stable after almost two years of fighting, pay for rebuilding, and prepare the country to join the EU in the future.

The package will help Kyiv with money while making sure prices don’t go up a lot like they did after Russia invaded in February 2022. Ukraine’s economy was severely hurt by war and being taken over by Moscow. Many factories in the east were taken by Russia.

The central bank needed to make more money to pay for government expenses, and as a result, prices went up a lot, reaching 26%. Last year, the economy got a little better, but Kyiv uses almost all of its tax money for the war.

As of Saturday, President Zelenskyy’s office and the Ukrainian finance ministry have not said how they will spend the money. However, EU authorities, Ukrainian lawmakers and diplomats have mentioned important things that worry them.

Zelenskyy was happy to receive help and he posted about it on a social media platform called X, which used to be called Twitter. He said that if the EU keeps giving money to Ukraine, it will help their economy stay strong in the long run. This is just as important as the military help and sanctions against Russia.

Russia’s economy has been able to withstand the economic sanctions from Ukraine’s Western allies better than expected. This is despite the fact that there is a limit on the price of Russian oil and natural gas, and other countries are looking for alternative energy sources instead of relying on Russia.

In late November, Moscow approved its largest federal budget, with more money going to the military than to social programs for the first time in modern Russian history. Low unemployment, higher pay, and more money for social programs have helped the Russian government deal with the effects of focusing the economy on preparing for war.

Some experts believe the government’s spending plans are not sustainable for a long time. They think taxes will go up after the presidential election in March.