The federal government has to plug large holes in its budget. And because the pot for aid to Ukraine has already been used up, a freeze on new military aid is in effect with immediate effect, according to a media report.
Germany is one of Ukraine’s most important allies in the war against Russia – and one of the largest donors of military aid. But according to a Report from the Frankfurter Allgemeine Sonntagszeitung (FAS) This is now changing: According to the current budget planning, the federal government no longer wants to provide any new aid payments to the attacked country for reasons of economy.
As the newspaper reports, citing documents and emails as well as discussions in several federal government offices, only military aid that has already been approved may be delivered to Kyiv. However, at the request of Chancellor Olaf Scholz, new applications will no longer be approved. Finance Minister Christian Lindner sent a corresponding request in a letter to Defense Minister Boris Pistorius and Foreign Minister Annalena Baerbock on August 5.
It states that “new measures” may only be taken if “funding is secured” in the budget plans for this and the coming years. It should be ensured that “the upper limits are adhered to”.
Confirmation from the Budget Committee
The ban is already in effect, as funds of around eight billion euros have already been earmarked for the current year. The maximum limit for next year is four billion euros, and this has already been overbooked. This means that an available IRIS-T air defense system cannot be financed, the newspaper writes.
According to FAS, confirmation of this came from the Bundestag’s budget committee. Andreas Schwarz, the SPD budget expert responsible for defense policy, told the newspaper that at the moment “no new orders are being placed for Ukraine because they are no longer financed.” CDU budget politician Ingo Gädechens also confirmed the restriction of aid to Ukraine: “From one day to the next, Olaf Scholz and his traffic light coalition are freezing financial and thus military support for Ukraine.”
Lindner relies on interest income from frozen Russian funds
At the same time, according to the report, Lindner does not expect military aid to Ukraine to be cut off for a year. Instead of coming from the federal budget, the money will in future come from the profits of frozen Russian assets.
According to the US government, around 280 billion US dollars (around 260 billion euros) of Russian central bank funds have been frozen in Western countries since the Russian attack on Ukraine, a large part of which – according to the EU Commission, around 210 billion euros – is in the European Union. At the G7 summit in June in Borgo Egnazia, Italy, negotiators agreed to finance a 50 billion dollar loan for Ukraine from the proceeds of these frozen sums.
While it remains unclear when the G7 decision can be implemented – especially since there are still major bureaucratic and legal concerns – the EU says it has already transferred a first tranche of EUR 1.5 billion from Russian interest income to Ukraine at the end of July.
The AFP news agency quoted sources in the Federal Ministry of Finance as saying that the German government is working “with the G7 states and the EU in particular to open up a financing instrument worth 50 billion dollars for Ukraine in the short term by using frozen Russian assets.” “Bilateral German aid remains at the highest level, but is relying on the effectiveness of this instrument.”