First meeting of the Steering Committee for the Multi-Agency Donor Coordination Platform for Ukraine
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Today, January 26, Prime Minister of Ukraine Denys Shmyhal opened the first meeting of the Steering Committee for the Multi-Agency Donor Coordination Platform for Ukraine. The initiative is launched to coordinate existing and new mechanisms to support Ukraine's budget, as well as rapid recovery and reconstruction.
The Platform is co-chaired by Minister of Finance of Ukraine Sergii Marchenko, White House Deputy National Security Advisor for International Economics Michael Pyle for the United States and Director General for DG Neighbourhood and Enlargement Gert Jan Koopman for the European Commission. The meeting was also attended by representatives of the G7 countries, European Commission and IFIs.
The parties discussed priorities and ways to improve the coordination of financial support to meet Ukraine's urgent budgetary needs during the war, as well as to restore and reconstruct the country.
Sergii Marchenko spoke about the negative consequences of Russia's full-scale invasion of Ukraine's economic and budgetary systems, and the actions taken by the Ukrainian Government that helped to maintain overall financial stability in the country, described reform priorities and financing needs – both for macro-financial support and for urgent recovery.
"The war provoked a reduction in State Budget revenues due to a significant increase in defense, social and humanitarian spendings and a decrease in tax revenues. Thanks to the support of our international partners, we managed to consolidate about USD 31 billion as of the end of 2022, which allowed us to finance more than half of the deficit”.
Ukraine’s budget deficit this year amounts to USD 38-billion. We managed to decrease the monthly deficit, and in 2023 it will be USD 3-3.5 billion a month, but it is still huge, especially given the separate immediate restoration needs, which are growing. EU MFA package of EUR 18 billion and USD 9.9 billion of grant support from the U.S. is a great achievement of our partners and strong support to Ukraine, but it still leaves Ukraine about USD 10-billion short.
The Minister stressed that the launch of the Multi-Agency Donor Coordination Platform for Ukraine will help Ukraine to find new effective solutions for financial support and reach a new level of cooperation.
The co-chairs of the Multi-Agency Donor Coordination Platform for Ukraine praised the efforts of the Government of Ukraine to maintain financial stability and assured of comprehensive support for Ukraine.
In terms of recovery, Ukraine identified key priorities that require rapid donor funding. In particular, the energy sector, demining, restoration of residential buildings and critical infrastructure, and economic support. About USD 17 billion is needed to implement the priority recovery, while the amount for the most urgent repairs for 2023 is USD 5.7 billion.
The parties also discussed the implementation of reforms to strengthen the country's sustainability and form a further basis for recovery. Sergii Marchenko noted that with the support of the International Monetary Fund and the European Commission, the Government of Ukraine has developed a broad reform agenda.
The Minister said: “We are glad to have a Monitoring Program with the IMF in place. We are working on the implementation of the measures included, and we are on a good track today, in particular with structural benchmarks. We hope that successful implementation of the Monitoring Program will pave the way to a fully-fledged program with the IMF, with the respective financing from the second quarter of 2023, which will help us to close the remaining budget gap.”
The parties agreed to work closely together to deliver financial assistance to stabilize Ukraine’s economy and underpin a sustainable and inclusive recovery of Ukraine.