Oh the Humanity! Kiev Devastated by US Plans to Swap Weapons Grants for Loans

© AFP 2022 / SERGEI SUPINSKY Ukrainian President Petro Poroshenko sticks an Ukrainian flag and the state emblem on an armoured vehicle at Kiev airport on March 25, 2015 during a welcoming ceremony of the first US plane delivery of non-lethal aid, including 10 Humvee vehicles
Ukrainian President Petro Poroshenko sticks an Ukrainian flag and the state emblem on an armoured vehicle at Kiev airport on March 25, 2015 during a welcoming ceremony of the first US plane delivery of non-lethal aid, including 10 Humvee vehicles - Sputnik International
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US media have published the details of an internal State Department memo showing Ukraine among the half dozen or so countries that may soon see their cash grants for the purchase of US weapons replaced by loans. Speaking to Sputnik, political analyst Dmitri Zhuravlev said that if the loans have commercial terms, Kiev won't be able to get them.

Over the weekend, the Wall Street Journal published the details of a State Department document identifying Ukraine, Colombia, Lebanon, Pakistan, the Philippines, Tunisia and Vietnam as countries which could see their cash grants for the purchase of US military equipment replaced with loans.

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Featuring varying terms, the grants had allowed US patron countries to acquire US-made ammo, ground transport, aircraft and naval vessels essentially free of charge, with US taxpayers picking up the tab.

But in the new State Department budget memo, the grants to all these countries have either dropped significantly, cut out entirely in favor of loans. According to unnamed sources, the measure, if implemented, should net the US budget about $1 billion in savings.

Last month, a separate leaked State Department memo revealed that Washington was considering nearly a 70% cut in USAID assistance to Ukraine in 2018. Kiev tried to squash the speculation, saying that the cuts would amount to 'only 30%'.

Speaking to Radio Sputnik, Ukrainian politics expert Dmitri Zhuravlev said that Kiev should have seen the cuts in US defense and economic aid coming.

"Trump promised to do this even during the election campaign; he's simply fulfilling his campaign promises," Zhuravlev said. "This is his style – that of a businessman: no freebies for anyone," the observer added. 

"Naturally, every rule has an exception; this includes the three countries that Trump simply can't not give money to [including Israel]…But his principled approach is 'if you want something from us – buy it.' And Ukraine for him is not a 'special' exception. Instead, it's 'just another country', and it must play by the rules that he, Trump, considers acceptable."

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According to Zhuravlev, replacing non-repayable US grants for loans will have a big impact on Kiev.

"If the loans have commercial terms, that is, if they are not guaranteed by the US government, Ukraine simply won't get them. Because given the state of their economy today, no normal bank would give them a loan. If the US government does back the loan, Kiev will get it, of course, but in that case [the US] will very rigidly control its use. Therefore, I think that in Ukraine [the country's elite] is in a state of mourning," the observer concluded.

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