A future without US aid: the government is unwilling to abandon populism
The United States has suspended military aid to Ukraine, which, in addition to the obvious problems on the front lines and in the rear, threatens to deepen ‘budget holes’ due to the need to increase military spending. In such conditions, saving all public funds becomes critically important.
How to save the budget
What are the current possibilities for saving budget funds? And is there a need for this, or can we continue to rely on the support of partners? People’s Deputy Danylo Hetmantsev explained that there are two expenditure items in the state budget that must be protected – these are, of course, expenditures on security and defense, and social expenditures, as they are enshrined in our legislation and cannot be reduced under the Constitution.
Regarding military expenditures, the people’s deputy does not rule out the need to increase them beyond this year’s plan.
Yurii Gaidai, a senior economist at the Centre for Economic Strategy, notes that the ‘military expenditure censorship’ proposed by Hetmantsev is a simple strengthening of fiscal discipline, which is always appropriate.
“Over the three years of the full-scale invasion, we have already cut many ‘civilian’ expenditures in real terms. However, it is advisable to conduct a rigorous and high-quality functional review of expenditures to subordinate them to wartime goals, which has not yet been done,” says the economist.
Among the possible steps, he mentions stopping capital expenditures that do not relate to critical infrastructure and housing reconstruction, ceasing funding for ‘dead’ universities and optimizing their network, stopping the ‘helicopter’ distribution of money (to everyone indiscriminately). In addition, Gaidai proposes limiting government subsidization of loans for businesses and individuals, subordinating all government support programs to strategic goals – the development of the defense industry, incentives for military personnel, and support for the purchase of housing for those who lost it as a result of the war.
As long as we have uncertainty in funding for 2026, there may also be an urgent need to ‘cover’ military aid from the US in case it stops. Therefore, the need for a reserve for next year is indeed present,” the expert emphasizes.
Source: UNIAN.
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