Germany cancels future funds for Ukraine’s war effort

German Chancellor Olaf Scholz has cancelled all future fund distribursements for Ukraine due to the lack of money. Germany will still supply money this year and next year thanks to existing commitments, but by 2026 it will fall to €500mn going foward. / bne IntelliNews

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By Ben Aris in Berlin August 18, 2024

First it was the Americans that ran out of money for Ukraine leading to a disastrous six month hiatus in supplies that allowed Russia to destroy 90% of Ukraine’s non-nuclear electricity generation capacity. Now it is the Germans turn: Berlin has frozen all additional military aid to Ukraine due to budget constraints, the Frankfurter Allgemeine Zeitung (FAZ) reported on August 18.

The decision, backed by Chancellor Olaf Scholz, was ordered by Finance Minister Christian Lindner and limits new funding for Ukraine's military needs to aid packages that have already been announced. No additional funds will be allocated for the coming years, despite ongoing military conflicts in Ukraine.

Bankova (Ukraine’s equivalent of the Kremlin) quickly posted a message on social media saying that financial aid to Ukraine by Germany would not be suspended.

Some commentators have pointed out that the final decision lies with Bundesrat, the parliament, which has not yet made a decision. It already approved additional funds last year, contrary to the government's draft budget, so a work around may still be found.

However, recent revelations that a Ukrainian diving instructor was behind the destruction of the Nord Stream 1&2 gas pipelines that belonged to Germany and was the major source of energy to the country, may complicate matters. German prosecutors have issued a warrant for his arrest, but, with Polish complicity, he fled to Ukraine.

Ukraine has been worried that the mounting Ukraine fatigue will reduce the support it gets from its Western allies. Eventually the US passed a new $61bn aid package on April 20, but that package is widely seen as the last big financial package the US will contribute to the war effort.

The EU also approved a four-year €50bn support package in February and is taking over as Ukraine’s main source of funds. In addition, a $50bn loan agreed by the G7 countries in July that will be serviced by interest payments from the $300bn of frozen Central Bank of Russia (CBR) reserves was approved, but as bne IntelliNews reported Ukraine is running out of men, money and materiel and the loan money is not expected until the autumn at the earliest.

This year the Ukrainian budget calls for a record $43bn deficit, but there is already a $12bn hole that needs to be filled, and the government is mulling making spending cuts, raising taxes and, as a last resource, turning the printing presses back on to cover the shortfall. Moreover, the outlook is for the situation to get worse; Ministry of Finance (MinFin) forecasts it will receive some $37bn this year from international donors, increasingly in the form of loans, but that will fall to $19bn by 2026.

Ukraine has already technically defaulted on its outstanding Eurobonds, after it was unable to start repayments at the start of August and was forced to restructure the debt, giving investors a 60% haircut, but offering them potentially lucrative GDP warrants as compensation. Under the deal some of the world’s biggest investors, including BlackRock, Amundi and Amia Capital, will write off a large part of $23.4bn by exchanging their bonds for new ones that will have maturities of as much as 12 years.

 

Germany’s decision comes at the worst time for Ukraine, which is slowly losing ground to the advancing Armed Forces of Russia (ARR) on the frontline inside Ukraine, but has also launched a bold attack on Russian soil in the Battle for Kursk and needs more money and arms than ever.

In a letter obtained by FAZ, Lindner outlined that future aid to Ukraine should be financed through the $50bn package recently agreed upon by the G7. However, the $50bn loan remains bogged down in wrangling over how the money will be distributed by the contributing countries and German has objected to participating saying that it has already contributed €37bn to Ukraine’s war budget and points out it is already the biggest contributor to the four-year €50bn package agreed at the start of this year.

One immediate impact of the decision is the inability to finance an IRIS-T fire unit that had been offered for immediate delivery by Germany’s Diehl Defence. The unit became available after another customer opted to defer their delivery to aid Ukraine following a devastating Russian missile attack on a children’s hospital in Kyiv in July. Despite the urgency, the funds were not approved, against the wishes of Defence Minister Boris Pistorius, but Norway has stepped in to provide the system.

The freeze on new military aid has reportedly led to significant tensions within the German government. Ministries led by Defence Minister Pistorius, Foreign Minister Annalena Baerbock, and Vice Chancellor and Minister for Economic Affairs Robert Habeck were strongly opposed to the lockdown. Sources told FAZ there was a major dispute within the government following the announcement.

FAZ reported that the funds for military aid in 2024 have already been fully allocated, with the planned €4bn for 2025 already overbooked.

The Federal Government itself has denied the FAZ report. The only reason aid to Ukraine was capped at €4bn in the budget is because there will be additional aid from another budget, the Chancellery said.

There was also no comment on how many weapons were currently being delivered, as this is usually only announced once the weapons, tanks and air defence systems have arrived in Ukraine .

The financial planning for subsequent years looks grim, with only €3bn earmarked for 2026 and a mere €500mn for both 2027 and 2028. Unless new money is found, the financial outlook for Ukraine is grim and that no new military aid pledges to Ukraine will be possible in the near future.

As a result, the $50bn G7 loan becomes a crucial source of funding for Kyiv.

Behind Germany’s budget problem is the November 15, ruling by the Federal Constitutional Court, which declared the second supplementary budget unconstitutional. The federal government had earmarked structural EU funds that it intended to use for the green transition, but the court ruled that the €60bn in question could not be reassigned under Germany’s so-called debt-brake rules, leaving a significant hole in the budget plans.

The federal government and the 16 federal states are obliged to balance their books, making taking out new loans very difficult. No other G7 country has such strict limits on new borrowing and the rules are enshrined in the German constitution. The debt brake became legally binding for the federal government in 2016 and for the states in 2020. Federal Finance Minister Wolfgang Schäuble (CDU) was then  able to present the first "black zero" balanced budget in 45 years in 2014. The only wiggle room the federal government has – regions have none --  is it is  allowed to borrow up to a maximum of 0.35% of GDP, or around €13bn in additional debt.

The debt brake can be suspended, "for natural disasters or unusual emergency situations beyond governmental control and substantially harmful to the state's financial capacity," categries the war in Ukraine do not fall into.

Russian state nuclear firm closely monitors two power stations in the warzone

Both the Zaporizhzhya and Kursk nuclear power plants are now in active fighting zones

This photo taken March 23, 2016 shows the monument to the victims of the 1986 Chernobyl tragedy in front of a new shelter installed over the exploded reactor at the Chernobyl nuclear plant, in Chernobyl, Ukraine. A new and highly virulent outbreak of malicious data-scrambling software caused disruption across the world Tuesday, June 27, 2017. The virus hit the radiation-monitoring at Ukraine's shuttered Chernobyl power plant, site of the world's worst nuclear accident, forcing it into manual operation. (AP Photo/Efrem Lukatsky)

Last updated: August 19, 2024 

ByDénes Albert

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Hghlights

The situation around the Zaporizhzhya and Kursk nuclear power plants is steadily deteriorating, Alexei Likhachev, CEO of the Russian state nuclear company Rosatom, told Rafael Grossi, Director General of the International Atomic Energy Agency (IAEA), in a telephone conversation on Saturday.

Rosatom’s press service reported how Likhachev had invited Grossi to the Kursk nuclear power plant and the town of Kurchatov to see the conditions there for himself.

Earlier in the day, Russia accused Ukrainian troops who had invaded the Kursk region of planning an attack on the Kursk nuclear power plant and holding Moscow responsible. Ukrainian foreign spokesman Heorhiy Tihiy denied the allegation on X, calling it “crazy” propaganda.

The Russian defense ministry, quoted by the Interfax news agency, stressed that a tough response would be given if any attack on the nuclear facility took place.

Similarly, the Russian management of the Zaporizhzhya nuclear power plant claimed on Saturday that a Ukrainian drone dropped an explosive device during the day on a nearby road where the plant’s personnel were driving.

According to Russia, “the Ukrainian attack posed a direct threat to the safety of the staff and the plant”. There was no word on whether anyone was injured.

The Zaporizhzhya nuclear power plant, the largest in Europe, came under Russian control shortly after the start of the Russian invasion in February 2022. Russia and Ukraine have since repeatedly accused each other of trying to sabotage the plant’s operation.

Slovak culture ministry issues list of risky books that includes Zizek, Forsyth and Hitler

Prime Minister Robert Fico (centre) and Culture Minister Martina Simkovicova (far right). / bne IntelliNews

By Albin Sybera August 19, 2024

The Slovak Ministry of Culture, led by far-right minister Martina Simkovicova, has issued an internal list of “risky” literature which includes Slovenian philosopher Slavoj Zizek, British novelist Frederick Forsyth, and also Adolf Hitler and Norwegian far-right murderer Anders Breivik. Other names listed in the document as risky authors are Stalin and American far-right conspiracy spreader Alex Jones.

The eclectic list is an internal document for the ministry’s employees to supposedly identify authors of works that can lead to the “radicalisation of persons in the context of modern technologies.”

The document was supposedly designed based on reports from Slovak intelligence service the Slovak Information Service (SIS), Czech liberal daily DenikN wrote.

Simkovicova –  who was nominated to the cabinet by the far-right party SNS and previously worked as a presenter at TV Slovak, which spread hoaxes about the COVID-19 pandemic, climate change and war in Ukraine  – is facing renewed calls for resignation after she sacked the heads of the country’s key cultural institutions, including Alexandra Kusa from the Slovak National Gallery and Matej Drlicka from the Slovak National Theatre earlier this month.

A total of 28,000 people protested the moves in the streets of the country's capital Bratislava over two days last week and the opposition, led by the centrist Progressive Slovakia (PS) party, vowed to push ahead with a vote of confidence against Simkovicova and Minister of Justice Boris Susko, who is slammed for releasing ex-prosecutor Dusan Kovacik, who was convicted of accepting bribes from the mafia and shielding its members from criminal investigations.

The left-right cabinet led by populist Prime Minister Robert Fico stepped up its efforts to complete the abolition of the rule of law while the European Commission is in the middle of a changeover following the elections to the European Parliament in June. Fico survived an assassination attempt in May and returned to politics this summer with baseless accusations that the would-be assassin was an “opposition activist”.

Fico’s cabinet already dismantled the special prosecution office overseeing high-profile corruption cases, which raised concerns in Brussels, and is set to dismantle a special anti-corruption police unit by the end of August.

Fico also used the cultural portfolio to attack the PS leader Michal Simecka after he and Simkovicova accused Simecka of benefiting from state subsidies through a foundation named after his grandfather, Czechoslovak writer, philosopher and communist-era dissident Milan Simecka. The Milan Simecka Foundation was set up some 30 years ago following the famed writer’s death in 1990.

Michal Simecka, who is 39, denied ever benefiting from the Foundation.

“If the Andrej Bagar Theatre in Nitra obtains state support, it does not mean that the family of Andrej Bagar benefits from it,” Simecka said, giving the example of the Slovak actor and director and the theatre in the town of Nitra named after Bagar.

Fico, Simkovicova and other members of the ruling Smer and SNS parties have relied on hoaxes about Brussels and liberal politicians to invoke conspiracies and build narratives that they are defending Slovak traditional values. Fico also said his coalition, which also includes the centre-left Hlas and holds a narrow majority in the parliament, will vote Simecka out of his post as the vice chair of the parliament, traditionally held by the leader of the strongest opposition party.  

Simecka vowed to go ahead with a confidence move against Simkovicova and also said he would make legal moves against Fico if Fico continued with the false attacks against him and his family.

Where is poverty highest in Europe?

The average poverty rate in Europe is 21% according to Eurostat, with the highest rates in Romania (32%), Bulgaria (30%), and Spain, and the lowest in Czechia (12%), Slovenia (13.7%), and Finland (15.8%). But the very lowest is in Russia (9.3%). / bne IntelliNews

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By bne IntelliNews August 19, 2024

In 2023, 94.6mn people in the EU (or just over 21% of the population) were at risk of poverty or social exclusion, reports Statista.

This means they lived in households facing at least one of three risks: income poverty, severe material and social deprivation, and/or living in a household with very low work intensity (where adults work less than 20% of their potential over the course of a year).

According to Eurostat data, this figure remained relatively stable compared to the previous year (95.3mn people in 2022, or 22% of the population).

As shown in the accompanying infographic, the share of people at risk of poverty or social exclusion varies significantly across EU countries. Last year, the EU countries with the highest rates were Romania (32%), Bulgaria (30%), Spain (26.5%), and Greece (26.1%). Meanwhile, the lowest rates were recorded in the Czech Republic (12%), Slovenia (13.7%), and Finland (15.8%).

For comparison, Russia recently announced that its fertility rate was “catastrophically low” at 1.4, well below the 2.1 rate needed to keep a population stable. However, Ukraine's birth rate has plummeted to 300-year low as country’s population collapses. These demographic problems have weighed on the poverty levels differently.

As reported by bne IntelliNews in its latest despair index – the addition of unemployment, inflation and poverty levels – Russia is currently enjoying one of the best despair index ratings in its modern history where poverty has fallen from 21.7% in 2020, according to Eurostat, to only 9.3% in 2023, Reuters reports – one of the lowest levels in Europe.

Poverty is hard to measure in Ukraine as few official statistics are being gathered thanks to the war, but Ukraine was already the poorest country in Europe before the war started. Just three months ago The World Bank estimated that around a third (29%, or roughly 9mn people) of the current population is living below the poverty line. According to The World Bank, an estimated 1.8mn more Ukrainians now live in poverty - since 2020; a situation that would be even worse had Ukraine not been the recipient of foreign aid to pay for pensions and salaries.

 

The Religious Composition of the World’s Migrants

Christians are the largest migrant group, but Jews are most likely to have migrated

BYSTEPHANIE KRAMERANDYUNPING TONG

(Mirsad Sarajlic/Getty Images)

How we did this

Who are migrants?

Migration has grown steadily in recent decades. Today, more than 280 million people, or 3.6% of the world’s population, are international migrants – meaning they live outside their country of birth.

Christians made up an estimated 47% of all people living outside their country of birth as of 2020, the latest year for which global figures are available, according to a new Pew Research Center analysis of United Nations data and 270 censuses and surveys.

Muslims accounted for 29% of all living migrants, followed by Hindus (5%), Buddhists (4%) and Jews (1%).

The religiously unaffiliated – i.e., those who say they have no religion, or who identify as atheist or agnostic – represented 13% of all the people who have left their country of birth and are now living elsewhere.¹

Over the past three decades, the total number – or stock – of people living as international migrants has increased by 83%, outpacing global population growth of 47%.

This report focuses on stocks rather than flows of migrants. We are counting all adults and children who now live outside their countries of birth, no matter when they left.

We are not trying to estimate how many­­­ move in a single year.

While the religious makeup of migration flows can change drastically from year to year – due to wars, economic crises and natural disasters – the total stock of migrants changes more slowly, reflecting patterns that have accumulated over time.

The religious makeup of all international migrants has remained relatively stable since 1990.

Our analysis finds:

• Christians make up a much larger share of migrants (47%) than they do of the world’s population (30%). Mexico is the most common origin country for Christian migrants, and the United States is their most common destination.
• Muslims account for a slightly larger share of migrants (29%) than of the world’s population (25%). Syria is the most common origin country for Muslim migrants, and Muslims often move to places in the Middle East-North Africa region, like Saudi Arabia.
• People without a religion make up a smaller percentage of migrants (13%) than of the global population (23%).² China is the most common origin country for religiously unaffiliated migrants, and the U.S. is their most common destination.
• Hindus are starkly underrepresented among international migrants (5%) compared with their share of the global population (15%). India is both the most common country of origin and the top destination for Hindu migrants.
• Buddhists make up 4% of the world’s population and 4% of its international migrants. Myanmar (also called Burma) is the most common origin country for Buddhist migrants, while Thailand is their most common destination.
• Jews form a much larger share of migrants (1%) than of the world’s population (0.2%). Israel is the most frequent origin country among Jewish migrants and also their top destination.
• Of the major religious groups, Jews are by far the likeliest to have migrated. One-in-five Jews reside outside of their country of birth, compared with smaller shares of Christians (6%), Muslims (4%), Hindus (1%), Buddhists (4%) and the religiously unaffiliated (2%).

How religion is connected with migration

People move internationally for many reasons, such as to find jobs, get an education or join family members. But religion and migration are often closely connected.

Many migrants have moved to escape religious persecution or to live among people who hold similar religious beliefs. Often people move and take their religion with them, contributing to gradual changes in their new country’s religious makeup. Sometimes, though, migrants shed the religion they grew up with and adopt their new host country’s majority religion, some other religion or no religion.³

While the migration patterns of religious groups differ, the groups in this analysis also have a lot in common. For example, migrants frequently go to countries where their religious identity is already prevalent: Many Muslims have moved to Saudi Arabia, while Jews have gravitated toward Israel. Christians and religiously unaffiliated migrants have the same top three destination countries: the U.S., Germany and Russia.

And, regardless of their religion, migrants often move from relatively poor or dangerous places to countries where they hope to find prosperity and safety.

These are among the key findings of a Pew Research Center analysis of international migrants around the world. The study is part of the Pew-Templeton Global Religious Futures project, which seeks to understand global religious change and its impact on societies.

The rest of this report contains chapters on:

• Chapter 1: Migrants living in each region
• Chapter 2: Global migration change, 1990-2020
• Chapter 3: Christian migrants around the world
• Chapter 4: Muslim migrants around the world
• Chapter 5: Religiously unaffiliated migrants around the world
• Chapter 6: Hindu migrants around the world
• Chapter 7: Buddhist migrants around the world
• Chapter 8: Jewish migrants around the world
• Geographic spotlights: A closer look at Europe, GCC countries, India and the United States

Migration since 2020

This report relies on UN estimates of stocks of international migrants around the world for 1990, 2020 and every five-year interval between.

In 2020, the COVID-19 pandemic severely restricted travel, causing a precipitous drop in migration. But movement has picked up since, and there have been some sharp shifts in migration flow patterns. For example, emigration from Ukraine has surged due to its war with Russia.

Even though this report does not include very recent migration, we do not expect that recent events have had much impact on the religious composition of migrants overall. Even large flows of people leaving a country become part of much larger stocks of migrants who have already left, and the characteristics of these stocks tend to change very slowly.

 

Religious composition of the world’s migrants, 1990-2020

This interactive table shows the estimated religious breakdown of immigrants to, and emigrants from, countries and regions of the world. Click the “Living in” button to see how many immigrants have moved into each country and remain there. Click the “Born in” button to see how many emigrants have moved away from each country and are living elsewhere.

You also can choose between counts and percentages (estimated number vs. % of all migrants). And you can toggle between decades to see how much change has occurred over time.

For an explanation of key findings and the methods we used to generate these estimates, read “The Religious Composition of the World’s Migrants.”

Pew Research Center also has estimated the religious composition of each country’s overall population.

Next: Migrants living in each region

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1. An additional 2% of global migrants belong to “other religions,” an umbrella category that includes Baha’is, Daoists (also spelled Taoists), Jains, Shintoists, Sikhs and adherents of many other religions. This report does not analyze those groups separately because in many countries, censuses and surveys do not provide sufficiently detailed data about them.↩
2. This report presents interim estimates of the overall population in each religious group (including migrants and nonmigrants) using data from three Pew Research Center studies: “The Future of World Religions” (projections of religious composition to the year 2020 published in 2015), “Modeling the Future of Religion in America” (2022) and “Measuring Religion in China” (2023). In the future, the Center will produce new estimates of the overall size of religious groups in 2020, based on data sources that have become available in recent years. Read the Methodology for details.↩
3. We have limited data on global patterns of religious switching after migration. Some studies have found evidence of considerable switching among migrants from China, who may join new religious communities as part of the process of integrating into their new home countries. Read, for example, Skirbekk, Vergard, Éric Caron Malenfant, Stuart Basten and Marcin Stonawski. 2012. “The religious composition of the Chinese diaspora, focusing on Canada.” Journal for the Scientific Study of Religion. Also refer to Yang, Fenggang. 1999. “Chinese Christians in America: Conversion, assimilation, and adhesive identities.”↩