France faces difficulties in raising funds for Ukraine aid package due to major spending cuts - Bloomberg

Massive spending cuts have left the French government struggling to put together funding for a package of as much as €3 billion in military aid to Ukraine, Bloomberg reports, UNN writes.

Details

The ministries of defense, foreign affairs and finance will be asked to redirect funds and find savings to pay for equipment ranging from missiles to artillery, sources familiar with the matter said, without elaborating as discussions continue.

The country's government's reserves are tight after it lowered its 2024 GDP forecast and said it needs to save €10 billion to meet budget deficit reduction commitments. And it has promised costly relief measures for farmers protesting rising prices, cheap imports and red tape.

Funding for the latter support will need to be found without making formal changes to this year's budget, said the people, who asked not to be identified, discussing confidential planning. One of the sources added that the 400 million euros allocated to fund the armed forces through 2027 does not include room for additional assistance, making the task more difficult. A spokesperson for the French Ministry of Defense did not immediately respond to a request for comment.

France has also been criticized for a lack of transparency in its assistance to Ukraine, leading to accusations that it is not doing as much as its European and NATO partners. 

Figures released on Friday showed that France has spent 3.8 billion euros on support, including SAMP-T anti-aircraft missile systems, Caesar self-propelled howitzers, AMX 10 armored vehicles and SCALP missiles.

"All of this is already a lot, but we are determined to do even more," French President Emmanuel Macron said as he announced the new package in Paris on Friday, standing next to Ukrainian leader Volodymyr Zelenskyy. This is the first time France has named figures for its aid.

Christophe Trebesch, an economist at Germany's Kiel Institute who tracks aid to Ukraine, told Bloomberg that France needs to be more transparent about its arms shipments, though he praised recent steps to provide more information.

European countries are exploring new ways to stimulate the continent's defense industry and deliver weapons to Ukraine, including joint borrowing. This idea was supported by Macron and Estonian Prime Minister Kaja Kallas.

Although this is likely to meet with resistance from more fiscally aggressive countries such as the Netherlands and Germany, the situation with the US delay in providing Ukraine with more than $60 billion in military aid and the prospect of Donald Trump's victory in the November elections have given new impetus to the idea, the publication writes.

Addendum

Macron signed a bilateral security agreement with Ukraine on Friday. This follows a similar agreement earlier in the day with Germany and last month with the United Kingdom on long-term support for Ukraine.

German Chancellor Olaf Scholz announces an additional package of air defense and artillery worth about 1.1 billion euros. The leaders of France and Germany stated that they would not abandon their support for Ukraine.