Ukraine heavily reliant on macro-financial aid — economist on indirect risks from Trump’s trade war

He shared his opinions with Espreso TV.  

"What could be cumulative for Ukraine? We are extremely dependent in terms of macro-financial aid. Remember Margaret Thatcher’s statement that there is no such thing as government money, only taxpayer money. So, the huge 20% tariffs on European countries, and 25% on metal, as we have already discussed, and probably 25% on machine engineering, just like with Canada, will definitely lead to a reduction in the money corporations pay into the budgets of European countries and the European Union. Given the ambitious plans of Europeans to increase spending on security and defense, it is quite likely that Ukraine’s macro-financial aid will face a funding shortfall. And this is the moment that actually worries me much more. Because, let me remind you, in 2025 we are living comfortably because we received a $50 billion loan, of which $39 billion is macro-financial aid, which will be repaid from the income from frozen Russian assets," he explained.

Oleh Pendzin noted that this decision by the G7, which was made at the end of last year, was before the U.S. elections. However, 2026 is a blank slate. 

"Well, meaning, where, how, and by what means macro-financial aid will be financed, because without it, we physically won’t be able to simultaneously manage security and defense spending while maintaining social standards. This is an extremely important issue. So, this secondary point, in my opinion, is more damaging to Ukraine than, say, the direct consequences of the tariff increases. By the way, what to do about this situation? We’ve already heard, to some extent, from a politician, Mr. Hetmantsev, who, in one of his addresses, directly proposed to the government to reconsider the possibility of stretching out this $50 billion loan over three years. Because otherwise, we will definitely face a severe deficit in 2026, having lived well through 2025. But these are, so to speak, general matters. I somehow think that the government will definitely seek diplomatic opportunities to support this. It’s not even about Ukraine's economy, but about the social block funded by borrowing," the economist emphasized.