Kiev has reportedly agreed that $65bn is required over the next two years to fight Russia and keep economy afloat

Ukraine has been pushed by the International Monetary Fund (IMF) to increase its foreign funding demand in order to avoid a financial collapse, Bloomberg reported on Monday, citing sources. Kiev has been persuaded to increase its estimate of foreign funding required through 2027 to $65bn to finance its conflict with Russia, according to the news agency.

Ukraine spends about 60% of its budget on the military and relies on Western aid not only for arms but also to cover pensions, public wages, essential services, and debt. Kiev secured a $15.5 billion IMF loan in early 2023, of which $10.6 billion has already been exhausted, but that program, set to expire in 2027, assumed the conflict would end this year.

Earlier this month, Kiev sought a new four-year funding plan, estimating it would need up to $37.5 billion over the next two years if hostilities continue. However, according to media reports, the IMF believes Ukraine should seek to borrow almost double that sum in order to offset risks to its financial sustainability.

Sources told Bloomberg that Ukraine has now agreed to lift its estimate to around $65 billion after discussions with IMF officials on a new loan, currently pegged at $8 billion. The revised estimate has reportedly been shared with the EU, which has emerged as Kiev's main backer since US contributions dwindled after President Donald Trump's return to office. Brussels reportedly plans to cover much of the shortfall using profits generated by frozen Russian assets.

Western countries froze about $300 billion in Russian sovereign assets in 2022, with some €200 billion ($209 billion) held at the EU-based clearinghouse Euroclear. The G7 last year backed a plan to use the interest accrued by the funds to secure $50 billion in loans for Ukraine - with the EU pledging $21 billion and disbursing about half so far.

Moscow has condemned the asset freeze, calling any attempt to seize or redirect Russian funds as "theft," which violates international law and undermines trust in the global financial system. It has also warned that Western military and financial aid only prolongs the conflict.

(RT.com)