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Germany pledges €1 billion in grants for Ukraine

May 19, 2022

The influx of cash aims to support the financing of Ukraine's government, as Russia's war has decimated tax revenue. The grant is part of over €18 billion pledged by G7 finance ministers during their summit in Germany.

German Finance Minister Christian Lindner
German Finance Minister Christian Lindner spoke at the G7 finance minister's meeting in Bonn Image: Thilo Schmuelgen/REUTERS

German Finance Minister Christian Lindner announced a contribution of €1 billion ($1.1 billion) for Ukraine's budget Thursday.

It came during a summit of finance ministers from the Group of Seven (G7) industrialized nations being held near the German city of Bonn.

Germany currently hosts the G7's rotating presidency. 

The money is set to come out of Germany's 2022 budget rather than from loans.

Financial support to keep Ukraine running

It aims to support Kyiv's finances hit by the war. It is estimated that Ukraine's government will need $15 million over the next three months to finance its operations, including paying salaries, as Russia's war has decimated tax revenues. 

The G7 are coordinating "commitments to finance the government functions of the Ukraine," Lindner said at the summit.

"We have to secure the liquidity of the Ukrainian state," he added. 

The German grant is part of $18.4 billion in transfers and loans committed by the G7 ministers, according to a draft communique seen Thursday by Reuters news agency.

"We will continue to stand by Ukraine throughout this war and beyond and are prepared to do more as needed," it said.

DW's reporter at the G7 summit, Ashutosh Pandey, said there is "a growing understanding among the ministers who have assembled here that Ukraine needs help and everything must be done to prevent it from going under."

"We know Ukraine is bleeding cash and it needs money to take care of its daily needs," he added.

Ukraine economy in deep depression

What have other countries pledged?

On Thursday, the US Senate approved a $40 billion aid package of military, economic and humanitarian assistance to Ukraine. Out of this, $7.5 billion is earmarked for filling gaps in Kyiv's budget. 

Speaking at the G7 meeting, US Treasury Secretary Janet Yellen said the ministers agreed to provide Ukraine the financial resources it needs in its struggle against Russia's invasion.

"The message was, 'We stand behind Ukraine. We're going to pull together with the resources that they need to get through this,'" Yellen said.

The European Commission has said it would pledge up to €9 billion of "macro-financial assistance in the form of loans," to be complemented by support from international partners including the G7.

Ukraine: German Foreign Minister on the responsibility of the G7 nations

wmr/rt (AFP, Reuters, AP)

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