Karina Bovsunovskaya10:40, 17.07.24

Last year, Germany allocated 8 billion euros in aid to Ukraine.

Germany’s cabinet is set to approve its 2025 budget after months of discussions, hoping a strong economic recovery will help ministers close the 17 billion euro gap between projected spending and revenue, Reuters reports .

The publication notes that the largest economy in the eurozone avoided a recession (a phase of the economic cycle during which there is a general decline in economic activity – UNIAN) at the beginning of the year, but growth turned out to be slower than expected, so the German government, like the UK and France, is trying to close the “budget hole.”

As a result, Germany’s budget for Ukraine will be reduced next year, as the government plans to cut military aid to 4 billion euros from about 8 billion euros in 2024, the draft budget notes.

“The 2025 budget is accompanied by medium-term financial planning until 2028, when a special armed forces fund designed to meet NATO’s minimum spending targets expires. With a year to go before federal elections, reaching agreement on the budget and a long-awaited economic recovery package has been a major test for a coalition often accused of being hobbled by internal divisions,” Reuters explains.

Journalists recalled that a few days after Russia’s full-scale invasion of Ukraine, German Chancellor Olaf Scholz announced a “Zeitenwende,” meaning “historic turning point,” with a special fund of 100 billion euros to modernize the army and meet NATO’s defense spending target of 2% of gross domestic product.

At the same time, sources in the Ministry of Finance reported that in 2028 the regular budget deficit will be 39 billion euros, and to achieve the NATO target without a special fund, 28 billion euros are needed. The sources also note that in 2026 and 2027 the funding deficit will already be 13 billion euros.

(C)UNIAN 2024