Germany can continue Ukraine aid in 2025

Germany will be able to continue aiding Ukraine in 2025, even if the federal budget is delayed due to the collapse of the coalition government, Reuters reported, citing an anonymous budget committee source and four other insiders.

The draft 2025 budget includes a reduction in Ukraine aid from €8 billion ($8.64 billion) in 2024 to €4 billion ($4.32 billion). However, a budget committee source stated that most of the aid could still be provided.

According to a government insider, Chancellor Olaf Scholz had aimed to increase Ukraine's support package by €3 billion ($3.24 billion) to €15 billion ($16.2 billion), funded by lifting borrowing restrictions. However, former finance minister Christian Lindner opposed the move.

Four unnamed sources said that the allocated funds for Ukraine primarily consist of appropriations, which can be distributed under temporary budget management if the primary budget is not passed on time.

Budget delays in 2025 would mean no spending on new projects, but additional Ukraine aid could still be approved.

"Launching new funding programmes would require a decision from the budget committee or the Bundestag. Thus, there is a certain limitation on new programmes, but everything already in place can continue as planned," said German Economy Minister Robert Habeck.

Rune Johansen, an analyst at Danske Bank, said that Germany would unlikely face a government shutdown like in the US, as a temporary budget management would be in place.