Brussels has declined Ukraine’s request for additional financial support this year, insisting Kyiv must implement key reforms before receiving further funding from the European Union. The decision comes as Ukraine faces intensified Russian attacks on civilian infrastructure and struggles to pass legislation required to unlock aid from the EU and other international donors.
In the summer, Ukraine identified a $27 billion shortfall in military funding and sought to accelerate disbursements from a €90 billion EU loan agreed upon late last year. The loan is structured to cover much of Kyiv’s financing needs in 2026 and 2027, with up to €45 billion available each year contingent on meeting specific reform benchmarks. However, only €15.7 billion has been released in 2023, partly due to delays in fulfilling reform conditions.
President Volodymyr Zelenskyy has emphasized the urgent need for additional resources, particularly to increase production of drones and defensive interceptors as Moscow escalates aerial attacks ahead of winter. Despite these appeals, the European Commission refused to frontload 2027 funds, instead encouraging Ukraine to meet reform targets that could unlock approximately €34 billion in aid this year.
In a joint statement, Ukraine and the European Commission affirmed their plan to cover Kyiv’s budget and defense needs for 2026, reaffirming the necessity of reforms for timely release of funds. Among the required reforms are the elimination of a VAT exemption for small parcels and the imposition of taxes on digital platforms. While both measures have passed in the Ukrainian parliament, an amendment weakening regulations on politically exposed persons (PEPs) has raised concerns. The EU has flagged this amendment, which could undermine anti-corruption frameworks, as potentially jeopardizing compliance with funding conditions.
European Commission officials Valdis Dombrovskis and Marta Kos addressed a letter to the speaker of Ukraine’s parliament, emphasizing that further financial assistance remains available if Kyiv upholds the requested reforms. They stressed that “avoiding any weakening of Ukraine’s framework on PEPs” is “essential” to maintain eligibility for EU support.
Despite reports suggesting tension during reform discussions, President Zelenskyy described his recent meeting with European Commission President Ursula von der Leyen as constructive. He underscored Europe’s strategic interest in supporting Ukraine, stating, “We are defending them” and urging greater cooperation to close Kyiv’s financing gap.
Meanwhile, the European Commission continues to evaluate Ukraine’s uncovered financing needs for 2027 amid ongoing developments in the conflict and governance reforms.