No telephone law and corruption. Six-time US Congressman on Financial Aid to Ukraine and Plan B for Ukraine

Getting financial support from Western partners becomes more difficult. The US Congress did not vote to allocate more than $60 billion in financial aid to Ukraine, but there is hope they will do it soon. There are also certain disagreements between the members of the European Union. At a recent summit in Brussels, Hungary blocked the allocation of €50 billion of aid to Ukraine, and it is hard to predict if the Europeans will come to an agreement.

The Pentagon recently stated that the US will have to choose between its own combat readiness and weapons supplies to Ukraine due to the exhaustion of funds to support Kyiv. And these are just a few of a series of similar statements and problems regarding international aid. If you compare the level of loyalty to Ukraine among the Western elite almost two years ago and now, you will see the difference.

The reasons for the decreasing support from international partners, internal US problems, the perspectives of the financial support of Ukraine by the Congress and the way Ukrainian corruptioninfluences them, Ukraine's investment reputation,and the growth points of the Ukrainian economywere the aspects a six-time Congressman, Jim Slattery, shared in an exclusive interview for Ukrainian News.

– The question that bothers Ukraine and the US the most in recent weeks is related to the problem with allocating financial aid to Ukraine is the question that has been bothering Ukraine and the US the most in recent weeks. The US Congress did not adopt the bill introduced by President Biden to allocate more than $60 billion for Ukrainian needs before the new year. The US Senate has difficult discussions on this issue, and there is no certainty in its adoption in the New Year. How do you explain that? Is the world tired of war, or are there other reasons for the decreasing support?

– It is indispensable to understand that problem-free allocation of aid to Ukraine, as it used to be at the beginning of the full-scale Russian invasion of Ukraine, could not last long. It is evident that during the first months of the resistance, the United States and the whole world were impressed by the resilience, courage, and strength of the Ukrainian people, so we did not stand aside then, and we continue to help now. However, it is critical to understand that domestic political issues increasingly absorb America. Besides, 2024 is the year of elections in the US. As President Joe Biden repeatedly reiterates, America will stay with Ukraine for as long as it is needed, but because of the pre-election year and inter-party relations, aid for Ukraine may not come as quickly and not in the desired amount. Still, I am convinced that the US Congress will approve continued aid to Ukraine in the next 30-45 days. I say this because at least 300 members of the House of Representatives favor aid to Ukraine, including the new speaker, Mike Johnson, and key Republican Committee Chairs.  It only takes 218 votes to pass an aid package in the House.  There are more than 60 Senators who favor continuing aid to Ukraine.  There is bipartisan support in both the House and the Senate.  Historically, when there are significant majorities in both houses to pass legislation, it will pass.  Regrettably, aid to Ukraine is tied up with a deep political dispute about how best to secure the Southern U.S. Border with Mexico. The Republicans are demanding significant changes in the Biden Administration's border and immigration policies as a precondition to approving aid for Ukraine. The politics of this is dominated by domestic considerations. The president will be forced to make a deal on the border to get aid to Ukraine and Israel.  This deal will be made, or the issues will be divided,and there will be a separate vote on aid to Ukraine and Israel.

I know this is a difficult time for our Ukrainian partners, but I am confident more aid is on the way. Churchill once mentioned that you can count on the USA to do the right thing, but only after exhausting all other options! Our political process is messy and slow at times, but it will get to the right decision on Ukraine aid. However, the Ukrainian authorities should consider looking for domestic resources to stabilize the economic situation in the country. This is exactly what America wants to hear: Ukraine has a plan B.

– What is the prospect of aid to Ukraine from the EU? Why do you think Viktor Orban is blocking this aid?

– Americans wonder what Orban is thinking given Hungary's recent history with Russia, especially the brutal invasion of Hungary by Soviet forces in 1956.His apparent close relationship with Putin and his opposition to economic sanctions on Russia are troubling. Orban is a big puzzle to Americans, especially those who are old enough to remember the Soviet Invasion of Hungary in 1956 and Czechoslovakia in August 1968. After the US Congress approves aid, I am confident that members of the EU will put great pressure on Orban to remove his veto. If Orban refuses, critical members of the EU will hopefully move forward with bilateral aid packages. Bilateral aid packages are possible even though the EU cannot make a unanimous decision because of Prime Minister Orban's position. 

– The Ukrainian Parliament stated that the government would be unable to pay wages and pensions in full, if not for the US help. It would lead to the printing of hryvnia, causing its inflation and devaluation. How and where can Ukraine take the domestic resources for growth now?

– Opponents of aid to Ukraine in the U.S. and the EU are looking for examples of corruption or incompetence in Ukraine that can be used to justify terminating aid to Ukraine. However, the performance of the Ukraine economy over the last year has surprised many in the West. Still, Ukraine depends on the West for military and economic assistance to meet urgent government financial needs.  It is important that economic assistance from the EU, Great Britain, and the US continue for the foreseeable future. At the same time, Ukraine shouldbecome the architect of its own economic destiny. Ukrainian patriots in all political factions must be aware of this and renew their commitment to rooting out corruption and incompetence wherever it is found. The authorities in Kyiv should also work independently to find funds that would add dynamics to the development of the Ukrainian economy. Cooperating with the US partners, but not counting barely on them. The way to Ukraine's financial independence lies through reforms, effective management, and implementation of commitments to international partners.

– What commitments do you mean?

– The IMF chief Kristalina Georgieva mentioned this at the meeting with the President of Ukraine and emphasized the financial part of requirements: reforms are expected from Ukraine to strengthen the budget, eliminate financial risks, ensure transparency of finances, as well as the management of public investments. And it is the reason Mrs. Pritzker (US President Joe Biden’s Special Representative for Ukraine’s Reconstruction, Penny Pritzker – Edit) is appointed. The political future of Ukraine and the financial assistance will depend on whether and how Ukraine will fulfill its commitments. Ukraine has the potential for development, and now is a time when everyone is ready to help and support, but there are several “but.”

– Which ones, for example?

– Take at least individual legal cases where the state tries private business. In difficult times for the country, business and the state should seek compromise and keep working for one goal: preserving the state and increasing profits to finance the army and the social sector. Any confrontation destroys unity and allows the enemy to play on disunity. The “Ukrinbank” case and similar ones are closely monitored in Congress. This one is about the financial institutions that have not yielded profits for years because of the court decision and lack of meaningful perspective from the Deposit Guarantee Fund.

The DGF wishes to return funds from the state budget and pay compensation to depositors at the expense of sold bank assets in the amount of 5-7% of their real market value. This is nothing compared to50-100 million US dollars the government wants to get through the restart of the bank and its assets. Then, the contributors will receive these funds, and the state budget will receive billions of revenues. However, this matter is currently pending before the Bankruptcy Court, and I hope for an objective court decision in the interests of the people of Ukraine. We realize that Ukrincom has the authority to collect all the loans it legally originated so that it will have the funds necessary to repay the Guaranty Fund. I have reason to believe that officials in the Zelensky Government understand the importance of this matter and are committed to finding a solution, consistent with the law of Ukraine. 

– What is Ukraine's reputation today for investors?

– The reputation of Ukraine is measured by the extent to which the judicial system is independent of the authorities. The “Telephone law” affects the reputational capital of the country. It can not but be reflected in the subsequent investment attractiveness. The depositors of this bank are foreign investors, in particular from the US, for whom respect for private property is a much more valuable asset than the “Black Friday sale” from DGF. “Reputation” is a trust to your steps today, which is based on the fulfilled promises in the past. These fulfilled commitments guarantee that you will be wished to cooperate with in the future. Everyone understands that it is a difficult time, but now Ukraine should make maximum effort to adhere to previous commitments. The rule of law, the independence of the judiciary, the fight against corruption, and respect for private property are the basis for the whole civilized world. And, going back to the question of the economy and the resources for Ukrainian growth, I should mention that fair courts and respect for private business are the only constructive positions investors understand.

– What will be the future policy towards Ukraine?

– Political leaders in Washington and the EU must not turn their backs on the courageous freedom fighters in Ukraine who have used less than 5% of the defense budgets of the West to destroy at least 50% of the Russian conventional military capability in 18 months. This tragic and senseless war will ultimately end at the negotiating table as all wars end. But Ukraine must have explicit security guarantees.