The Trump Factor: Can the U.S. President affect IMF financial support for Ukraine?

The USA is Ukraine's primary ally in the ongoing conflict. The country across the ocean not only supplies the Defense Forces with essential weapons and ammunition but also provides significant financial assistance. In the first year of the full-scale invasion by Russia, the United States became the largest donor to the Ukrainian budget.

Over time, political turbulence has prompted the US to reassess its role in supporting Ukraine. A year before the presidential elections, the levels of budgetary support began to gradually decline. With the change in leadership at the White House, relations between Washington and Kyiv are going through yet another stage of cooling.

However, the high-profile statements made by the new president, Donald Trump, not only stress the nerves of Ukrainian top officials but could also cost billions of dollars in financial support for the domestic budget.

Although American taxpayer funds no longer play as decisive a role in financing Ukraine as they did in 2022, Trump still holds financial leverage over the Ukrainian authorities. One such tool is the International Monetary Fund (IMF).

"Honor Student" of Wartime

On February 20, 2025, the seventh IMF mission within the cooperation program that began two years ago commenced its work in Kyiv. The results of this mission will determine whether Ukraine will receive $917.5 million.

This is a unique program. Firstly, the IMF has never before provided loans to countries in a state of war. Secondly, in all 32 years of cooperation with the fund, Ukraine has never advanced so far in meeting the program's conditions.

In recent years, our state has become an "honor student," diligently completing the "homework" assigned by the IMF: enacting necessary laws, reforming courts, law enforcement and fiscal agencies, and conducting a measured (as much as possible in wartime conditions) and cautious policy. At least, this was the case until recently.

This is not surprising, as the IMF remains one of the largest donors to the Ukrainian budget, which is financed by external sources for half of its expenditures.

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According to the Ministry of Finance, since the onset of the large-scale war, the IMF has provided Ukraine with loans totaling nearly $12.5 billion. Only the EU and the USA have contributed more to the budget.

In 2022, Ukraine received two emergency financing tranches from the IMF (under the Rapid Financing Instrument program) of $1.4 billion and $1.3 billion. Subsequently, the fund had to alter its internal policy and establish a long-term cooperation credit program (Extended Fund Facility) worth $15.6 billion with the Ukrainian authorities.

However, currently, the inflow of funds from the IMF resembles refinancing more than the acquisition of "fresh money." In 2025-2027, Ukraine will receive less from the fund than it spends on repaying previously taken loans.

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Despite this, the IMF program remains crucial, as, firstly, without receiving new tranches, Ukraine would have to spend much more on repaying old loans from the fund.

Secondly, compliance with the IMF's requirements is also monitored by other creditors and donors of Ukraine, including Japan, Canada, Norway, and others. Furthermore, this compliance affects the receipt of $50 billion allocated by the G7 countries to secure frozen Russian assets. This financial cushion will allow our state to survive at least the next few years.

"Funds that cannot be used for defense needs must be stretched over two years, as the prospects for budget financing in 2026 are far from clear," noted the head of the Budget Committee of the Verkhovna Rada, Roksolana Pidlasa.

The Largest "Shareholder"

From the very beginning of the war, the IMF supported Ukraine, despite its less-than-ideal credit history. Even after previous cooperation programs were disrupted by the Ukrainian authorities, the fund continued to provide financing and even revised its internal policies that do not allow loans to be granted to countries without clear macroeconomic forecasts.

This support was largely made possible by political will at the highest levels. This will was ensured by the member countries of the IMF with the largest quotas and, consequently, the most votes needed for decision-making.

A country's quota in the IMF depends on its position in the global economy. The most significant factor influencing this is the size of GDP. Additionally, factors such as economic openness, reserve volumes, and so on also affect the quota.

The United States holds the largest quota in the IMF at 17.4%, securing 16.5% of the votes. Japan and China each hold around 6% of the votes, while Germany, the largest economy in the EU, has a voting share of 5.3%. Russia, which is also a member of the IMF, has a vote share of nearly 2.6%, while Ukraine's share is only 0.43%.

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Since no single country holds a decisive majority of votes, it cannot unilaterally block any decision. However, without the support of the largest "shareholders" of the IMF, it may become more challenging for Ukraine to secure favorable decisions from the fund regarding the allocation of subsequent loan tranches.

Currently, the so-called democratic camp countries account for about 60% of the votes in the IMF. However, this situation could change dramatically if the USA were to withdraw its votes. Such concerns were present as early as late 2024, and recent statements by President Trump have only added fuel to the fire.

"During the previous mission, when it became known that Trump had won, IMF representatives were very worried. I believe it is only a matter of time before the new US Treasury Secretary begins to raise questions," said one participant in the meetings with the IMF mission.

Theoretically, the IMF is an institution whose operations should not depend on changes in the political leadership of individual countries. However, in practice, the largest "shareholders" of the fund wield significant influence over the organization's policies.

For example, in the previously mentioned IMF program with Ukraine, it was the Western diplomats who were the driving force that compelled the fund to agree to grant a loan. As government sources have reported, US and EU representatives effectively "bent the IMF to their will" to modify policies that had been established over many years.

Whether such influence from US representatives on the IMF will work in reverse to block financing for Ukraine is still uncertain. However, Ukrainian officials involved in negotiations with the fund are already concerned about the stability of future external financing. This concern extends not only to the IMF itself but also to other partners and frozen Russian assets.

Will There Be Money?

In 2025, Ukraine expects to receive four IMF tranches totaling $2.7 billion. However, the receipt of these funds is currently in question, not only due to geopolitical factors but also because of the borrower's preparedness level. As of the seventh review, the Ukrainian authorities have not met three of the fund's benchmarks.

Firstly, Ukraine has not established a new administrative court to replace the dissolved District Administrative Court (OASK) from 2022. This court addressed disputes against government authorities (notably, it issued the famous ruling to annul the nationalization of "PrivatBank" in 2019).