Zelensky ‘losing his lustre' as EU withholds aid to Ukraine
The European Union said on Friday that it would withhold €1.5 billion (about $2.7 billion) from an overall fund of €4.5 billion whose disbursement is dependent on achieving good governance standards and that can't be used for military purchases. The decision is not final, however, and the funding can be restored if Ukraine meets certain benchmarks.
Zelensky had no public comment on the aid cut, which nevertheless was a setback for Ukraine's leader, who is depending on European financial support to fill gaps left by the Trump administration's refusal to underwrite Ukraine's war effort.
While holding back Western aid to spur reform was common before Russia's invasion, Friday's decision seemed to signal a new willingness by the bloc to admonish Zelensky's government on domestic policy during the war. It also raised questions about whether the glow around Zelensky might be beginning to dim among Ukraine's Western allies.
James Wasserstrom, an American anti-corruption expert, said that 'the lustre is definitely coming off' Zelensky's wartime leadership among governments providing financial assistance. He added, 'There is exasperation at Zelensky in the donor community.'
The EU's decision capped a tumultuous week for Zelensky, who first pushed a measure through parliament that stripped the independence of two anti-corruption agencies, raising protests from foreign leaders as well as the Ukrainian people.
He then reversed course, submitting a new bill to parliament to restore the agencies' independence. That calmed the street protests, but could not head off the EU's aid cut, which had been decided on the basis of long-standing guidelines.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

AU Financial Review
31 minutes ago
- AU Financial Review
US reaches new trade deal with European Union
Global pharmaceutical giants, including Pfizer and Johnson & Johnson, are paying a tiny fraction of the billions of dollars they earn from drug sales in local taxes, at a time when they're lobbying US President Donald Trump to force an overhaul of Australia's Pharmaceutical Benefits Scheme. An analysis of earnings statements filed with the corporate regulator by five of the biggest US and European drugmakers shows the companies on average pay between 2 per cent and 4 per cent of their Australian sales in income tax. The numbers may make for uncomfortable reading for drug multinationals as they step up efforts to loosen the PBS' grip on the pricing of key medicines.


SBS Australia
31 minutes ago
- SBS Australia
EU and US announce tariff deal to avoid spiralling trade war
The United States struck a framework trade deal with the European Union on Monday AEST, imposing a 15 per cent import tariff on most EU goods, but averting a spiralling battle between two allies which account for almost a third of global trade. The announcement came after European Commission President Ursula von der Leyen travelled for talks with US President Donald Trump at his golf course in western Scotland to push a hard-fought deal over the line. "I think this is the biggest deal ever made," Trump told reporters after an hour-long meeting with von der Leyen, who said the 15 per cent tariff applied "across the board". "We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability," she said. The deal, which also includes US$600 billion ($914.9 billion) of EU investments in the United States and US$750 billion ($1.1 trillion) of EU purchases of US energy over Trump's second term, will indeed bring clarity for EU companies. Even so, the baseline 15 per cent tariff will be seen by many in Europe as a poor outcome compared with the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30 per cent rate. German Chancellor Friedrich Merz welcomed the deal, saying in a statement that a trade conflict had been averted that would have hit Germany's export-driven economy and its large auto sector hard. But Bernd Lange, the German Social Democrat who chair's the trade committee of the European Parliament, said he was "quite critical" because the tariffs were imbalanced and the pledged $600 billion of investment would likely come at the expense of EU industry. The euro rose around 0.2 per cent per cent against the dollar, sterling and yen within an hour of the deal. The deal mirrors key parts of the framework agreement the United States clinched with Japan last week. Shipping containers and cargo ships seen in the port of Barcelona one of the biggest sea ports of Europe. Source: AAP / Davide Bonaldo / SOPA Images "We are agreeing that the tariff ... for automobiles and everything else will be a straight-across tariff of 15 per cent," Trump said. That rate will not, however, apply to steel and aluminium, for which a 50 per cent tariff will remain in place, although von der Leyen said it would be cut and replaced with a quota system. Von der Leyen said the rate also applied to semiconductors and pharmaceuticals, and there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. "We will keep working to add more products to this list," she said, adding that the situation on spirits was still to be established. Eric Winograd, chief economist at AllianceBernstein in New York, noted the similarity with Japan's US deal. "We will need to see how long the sides stick to the deal. From a market perspective, it is reassuring in the sense that having a deal is better than not having a deal," he said. Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of "90 deals in 90 days." He has periodically railed against the European Union, saying it was "formed to screw the United States" on trade. Arriving in Scotland, Trump said the EU wanted "to make a deal very badly" and said, as he met von der Leyen, that Europe had been "very unfair to the United States". His main bugbear is the US merchandise trade deficit with the EU, which in 2024 reached $235 billion, according to US Census Bureau data. The EU points to the US surplus in services, which it says partially redresses the balance. Trump also talked on Sunday about the "hundreds of billions of dollars" that tariffs were bringing in. On 12 July, Trump threatened to apply a 30 per cent tariff on imports from the EU starting on 1 August, after weeks of negotiations with the major US trading partners failed to reach a comprehensive trade deal. The EU had prepared countertariffs on 93 billion euros of US goods in the event there was no deal, and Trump had pressed ahead with 30 per cent tariffs. Some member states had also pushed for the bloc to use its most powerful trade weapon, the anti-coercion instrument, to target US services in the event of a no-deal.

Sky News AU
an hour ago
- Sky News AU
US and EU reach trade deal with 15 per cent US tariff on most EU exports amid Trump Scotland visit
The United States and the European Union have reached a framework deal, with the US imposing a 15 per cent import tariff on most EU goods amid efforts to avoid a costly trade war. The announcement comes during US President Donald Trump's visit to Scotland, where European Commission President Ursula von der Leyen met with Trump at his golf club on Sunday, local time. "I think this is the biggest deal ever made," Trump told reports following the meeting between the pair, while Ms von der Leyen said the tariff applied "across the board". "We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability," she said. The deal also includes $600 billion of EU investments in the US and $750 billion of EU purchases of US energy over Trump's second term. The baseline 15 per cent tariff, which will be seen by many in Europe as a poor outcome compared with the initial European ambition of a zero-for-zero tariff deal, is better outcome than the threatened 30 per cent rate. German Chancellor Friedrich Merz has welcomed the del, claiming in statement that a trade conflict had been averted that would have hit Germany's export-driven economy and its large auto sector hard. The European Commission President's trip to Scotland comes after previous discussions between US officials and European Union trade chief Maros Sefcovic failed to produce an agreement. Mr Sefcovic had flown to Washington DC after President Trump threatened to impose new 30 per cent tariffs on the EU unless the 27-member bloc could reach a trade agreement with the US by August 1. Speaking to Reuters on condition of anonymity prior to Sunday's meeting, a Trump administration official was "cautiously optimistic" about the showdown talks, but warned it would be unwise to pre-empt an outcome. "It's not over till it's over," the official said. While the impact of escalating tariffs on China were felt by many US businesses and consumers, a trade war with the EU would likely be much more severe. The US and EU are each other's largest trading partners by far and account for a third of global trade. With Reuters