US President Joe Biden decided to write off a loan of about USD 4.7 billion or the equivalent of IDR 73.8 to Ukraine. This view is not the same as President-elect Donald Trump who will take office next year. Photo/Doc
As of February 2022, the United States Congress has approved an aid package worth more than USD 174 billion to support Ukraine in its conflict with Russia. The latest tranche, approved in April, includes more than $9.4 billion in “allowable loans” to help fill gaps in Kiev’s budget.
“We have taken the steps outlined in the law to cancel the loan,” said State Department spokesman Matthew Miller last Wednesday.
He confirmed that Biden wants to eliminate half of that amount, or about $4.7 billion. Debt cancellation is “in the national interest of the United States and its partners in the European Union, G7+, and NATO,” the State Department claimed in a letter to Congress dated Nov. 18, according to Bloomberg.
Meanwhile, President-elect Donald Trump said on the campaign trail that he would not oppose Congress agreeing to send more aid to Ukraine, noting as long as the aid comes in the form of loans rather than gifts. funded by the taxpayer.
Rebranding aid as loans was one of the key adjustments that helped push through April’s $61 billion package after months of deadlock between Republicans and the White House.
Senator Rand Paul, on the other hand, has vowed to block debt cancellation, arguing that it places an unfair burden on American taxpayers.
“I will force a vote to prevent Biden from turning Ukraine’s debt into an American problem. His proposal places the burden of corrupt Ukrainian businesses, farmers and bureaucrats on the shoulders of hardworking Americans,” Paul wrote in a statement on X center of the week.
As is well known after the long war, the Ukrainian government is almost entirely dependent on Western aid to keep its economy afloat. In September, Kiev adopted a draft 2025 budget, predicting a 75% deficit and estimating that between $12 billion and $15 billion would be needed to cover the shortfall.
What are the implications of President Biden’s loan cancellation for Ukraine’s economy?
Interviewer (Time.news Editor): Welcome to Time.news. Today, we’re diving into the significant decision made by President Joe Biden to write off about USD 4.7 billion in loans to Ukraine. To help us understand the implications of this move, we have with us [Expert’s Name], a renowned political analyst and expert in international relations. Thank you for joining us today.
Expert: Thank you for having me. It’s great to be here to discuss such a pivotal moment in U.S. foreign policy.
Interviewer: Let’s start with the basics. Why did President Biden decide to cancel this substantial loan to Ukraine right now?
Expert: The timing of this decision is quite strategic. With the ongoing conflict between Ukraine and Russia, the U.S. aims to provide immediate support to stabilize Ukraine before the transition to President-elect Donald Trump’s administration. This move reflects a commitment to uphold Ukraine’s sovereignty and assist it during a critical period.
Interviewer: That makes sense. In broader terms, how does this loan cancellation fit into the larger context of U.S. aid to Ukraine?
Expert: It’s part of a much larger support framework established by Congress. As of February 2022, Congress approved an astounding aid package totaling over USD 174 billion. This includes not only loan cancellations but also various forms of financial support aimed at bolstering Ukraine’s defense capabilities and stabilizing its economy amid the ongoing conflict.
Interviewer: Speaking of financial support, the recent tranche approved in April included more than USD 9.4 billion in “allowable loans.” How does this differ from the direct loan cancellation?
Expert: Good question. The “allowable loans” are different in that they are meant to help Ukraine fill budget gaps and keep its economy afloat, whereas the loan cancellation directly alleviates debt pressure. By relieving Ukraine of this USD 4.7 billion debt burden, the Biden administration is providing immediate financial relief, which can be critical for their short-term economic stability.
Interviewer: With Donald Trump taking office next year, what does this mean for Ukraine’s future aid? Could we see a shift in policy?
Expert: That’s an important consideration. Trump has previously expressed skepticism about extensive foreign aid, which raises concerns about continuity in U.S. support for Ukraine. The cancellation of this loan may send a strong message about the current administration’s priorities. However, the extent to which Trump’s administration will change course remains to be seen. There could be pressure from Congress, given the bipartisan support for aiding Ukraine.
Interviewer: Given this context, what are the potential consequences of Biden’s decision on U.S.-Ukraine relations?
Expert: Biden’s decision could strengthen U.S.-Ukraine relations in the short term, demonstrating America’s commitment to supporting its allies in geopolitical conflicts. This could also embolden Ukraine as it continues to face challenges from Russia. However, if the subsequent administration adopts a more isolationist stance, it could lead to uncertainty and strain the relationship in the long run.
Interviewer: how do you see the international community reacting to Biden’s loan cancellation?
Expert: I believe many allies in Europe will view this move positively. It signals that the U.S. remains engaged in global affairs and is willing to support its allies. However, there may also be skepticism about the sustainability of this support under future U.S. administrations. Ultimately, this decision showcases America’s role as a leader in the international community, at least for the time being.
Interviewer: Thank you, [Expert’s Name], for your insights. This has been a valuable discussion on a crucial topic. As these events unfold, we’ll certainly be watching how U.S.-Ukraine relations evolve and how the global community reacts.
Expert: Thank you for having me. It’s always a pleasure to discuss these pressing issues.