Prime Minister Denys Shmyhal has requested an emergency meeting with international donors amid uncertainty over Ukraine's budget for the upcoming year, Bloomberg reported on Dec. 28.
Congress has been unable to pass a $61 billion funding package for Ukraine amid months of infighting, while Hungary vetoed a four-year EU funding package for Ukraine worth $55 billion at the European Council summit in mid-December.
Shmyhal reportedly sent to the Multi-agency Donor Coordination Panel (MDCP), which was set up by the Group of Seven (G7) to coordinate funds, in which he warned of the "exceptionally high uncertainty" Ukraine is facing over its budget for the upcoming year.
"It is imperative that we receive sufficient, prompt, and predictable external financing, beginning January 2024," or else Ukraine's economic stability will be at risk, Shmyhal said in the letter to the MDCP, according to Bloomberg.
"It is hardly possible to hold any discussion about recovery and rebuilding projects, when we struggle fulfilling the 2024 survival priorities," the letter reportedly read.
Economy Minister Yuliia Svyrydenko echoed this sentiment when she told the Financial Times on Dec. 27 that Ukraine may have to prioritize spending on defense above paying salaries if Western aid does not materialize.
According to Svyrydenko, 10 million pensions, as well as the wages of 500,000 civil servants and 1.4 million teachers, are at stake. "There's a huge risk of underfunding of certain social sectors," she said.
Ukraine could manage for a few months by borrowing money or transferring funds from the central bank to the government, but that could "unleash inflation and undermine financial stability," the Financial Times said, citing Western officials.
In an interview with the Kyiv Independent on Dec. 19, Ukrainian Foreign Minister Dmytro Kuleba said that the EU should approve financial aid for Ukraine within the next month.
"It's all in the hands of the European Union itself, but the timeline that we were given is by the end of January," Kuleba said.