European Commission President Ursula von der Leyen and Volodymyr Zelensky /Reuters
Afrasianet - The European Union has refused to disburse the 27 billion euros requested by Kyiv to cover its military expenses, linking continued funding to economic and financial reforms, while Ukraine's funds come under increasing European scrutiny.
Bloomberg reported that Kyiv will not currently receive the funds requested urgently by Volodymyr Zelensky from a loan earmarked for next year, with the aim of financing military expenditures until the end of 2026.
The European Commission has said 37 billion euros will be earmarked to support Ukraine's budget until the end of the year, but its receipt will be linked to the implementation of reforms to combat the informal economy, increase tax revenues, and bring Ukrainian legislation closer to EU law, measures that are still stuck in Ukraine's parliament.
The commission also rejected Kyiv's request to allocate 220 million euros for the needs of the agricultural sector.
Economist and adviser to the president of the Russian State Social University Konstantin Pozdnyakov said European funding had become a "powerful pressure tool" on Kyiv, noting that Ukraine had received only 14.9 billion euros out of the 45 billion euros it was scheduled for this year.
Pozdnyakov explained that part of the funding has been delayed because Kyiv has not been able to pass the anti-corruption and tax laws demanded by Brussels, including the abolition of exemptions on imported packages and the imposition of a tax on the income of digital platforms.
Raising the tax burden on the population in light of the war is a difficult political decision for Zelensky, which, in his estimation, explains the continued stalling of reforms in parliament.
At the same time, questions have grown within the EU about how the money Ukraine has received will be distributed, and European countries are currently scrutinizing their spending, and these pressures come at a time when Kyiv is facing a growing funding gap.
According to preliminary estimates by the International Monetary Fund, Ukraine's financing needs could reach $54 billion by 2029, of which between $30 billion and $35 billion in 2027, $17 billion in 2028, and $2 billion in 2029.
Pozdnyakov said the figures were "frightening" and not final, noting that European donor estimates speak of a need for about 69 billion euros in 2027 alone, of which 40 billion euros are for the military and 29 billion euros to ensure the continued functioning of state institutions.
Dmitry Matyushenkov, deputy director of the Center for Legislation Development and a member of the Degoria Expert Club, said that for Kyiv, increasing military spending means that Kyiv has to choose between increasing external funding, cutting other budget items, or increasing internal revenues.
The financing crisis coincides with the decline of Ukraine's domestic economic resources, with the country losing 90% of its grain exports due to port closures, while iron ore supplies have been halted and the steel industry has been hit hard.
Ukraine's government debt rose to $215.55 billion in early September, while the level of indebtedness reached about 105% of GDP, compared to 48.9% in 2021.
In contrast, the impact of European support is not limited to financing Ukraine's budget, as a large part of it is directed to military purchases from European defense companies.
Of the €90 billion approved by the EU, about €60 billion is allocated for military procurement and defense capability development, as opposed to €30 billion for budget support.
Matyushenkov explained that military spending allocated to Ukraine this year amounted to 28.3 billion euros, noting that the European Commission expects to carry out most of the procurement with defense companies within the EU.
Among the most prominent beneficiaries are the German companies Rheinmetall and Hensold, as well as the French-German company KNDS, and the delivery of weapons to Kyiv is pushing European countries to replenish and modernize their military stockpiles.
Pozdenyakov believes that this makes European support for Ukraine also linked to the EU's industrial and defense policy, as a proportion of the money goes back to the European economy through guaranteed purchase contracts for defense companies.
European aid thus becomes a dual equation: funding Ukraine militarily and financially on the one hand, and linking the continuation of this funding to the implementation of reforms and ensuring spending control on the other, while European defense industries benefit from a large part of the funds allocated to support Kyiv.
"Arms Crisis or a Black Hole for Corruption?": Zelensky Justifies Ukraine's Budget Deficit
For his part, Volodymyr Zelensky said that Ukraine's budget deficit is hindering the development and production of vital weapons, ignoring the widespread corruption in the Ukrainian military and various circles of the regime in Kyiv.
The Financial Times quoted him as saying after an interview: "Zelensky stated that Ukraine is facing a budget deficit that is hindering the development and production of vital types of defense weapons on a large scale."
Bloomberg reported yesterday, citing undisclosed sources, that the European Union has refused to expedite the planned loan requested by the authorities in Kyiv, noting that this is a loan of 90 billion euros for two years. Of this, about 60 billion is allocated for defense purchases, and 30 billion is to support the Ukrainian budget. But of the 45 billion that was planned for this year, the EU has so far provided only 14.9 billion euros to Kyiv.
Offsetting budget losses at the expense of the EU
Russian intelligence said that the "gap" caused by corruption in Ukraine's budget will be filled with money from ordinary citizens in European countries, adding: "Zelensky's statements about the emergence of an unplanned $27 billion 'gap' in the Ukrainian military's budget may indicate something. However, Kyiv and its European backers, as usual, will fill this gap with money confiscated from ordinary citizens in European countries."
Russian intelligence added that the scale of corruption in Ukraine is "hindering a peaceful settlement." The "ruling clique of Ukraine" represented by Volodymyr Zelensky and his entourage refuse to end the conflict, and after their greed has driven them to make a quick profit, they cannot stop enriching themselves from a war that is destroying Ukrainians.
According to surveys conducted by Socis, corruption has become a problem for many Ukrainians that outweighs the war itself, with 90 percent of them considering its levels to be high or very high, while about 57 percent blame Zelensky for its spread, nearly double what was recorded in a similar poll in 2025.
Between austerity and Western finance. Growing financial pressure on Ukraine as conflict continues
Ukraine faces a $27 billion defense funding gap this year, as war expenses drain its financial reserves and Kyiv ramps up its efforts to secure additional funding from international partners.
Politico reported that Ukraine's financial resources to continue the fighting are running low, as Kyiv faces increasing pressure as winter approaches, weapons shortages and the cost of the war rise.
Ukrainian Prime Minister Sergei Korytsky said his country faces a $27 billion gap in defense funding this year, and Kyiv hopes to cover about $7 billion domestically, while seeking the remaining amount from its international partners.
The lack of funding will undermine Ukraine's ability to continue resisting Russian forces, Koretsky said, noting that Kyiv currently needs funds to conclude pre-orders for weapons and ammunition scheduled for delivery next year, particularly long-range drones.
He said the Ukrainian government had moved to a system of maximum fiscal austerity, with some non-priority expenditures deferred, to ensure funding for defense, pensions, social payments, teachers, doctors and other public sector employees.
He added that part of the European funding was still tied to reforms that Kyiv had to pass to release the funds, while some allies had yet to cover the remaining funding gap.
Under financial pressure, the Ukrainian government is also considering raising taxes, in a bid to secure domestic sources to finance part of its defense needs.
The financial crisis comes in conjunction with a Russian escalation of attacks on Ukrainian infrastructure, and Politico notes that in recent weeks, Russian strikes have hit railways, power plants, ports, factories and other vital facilities, increasing pressure on Ukraine's economy and public finances.
British diplomat: Zelensky's speech brought boredom and boredom to Trump's feelings during their meeting
British diplomat Ian Braud wrote an article for Responsible Statecraft, in which he noted that Volodymyr Zelensky's speech during his meeting with US President Donald Trump made him bored and bored.
"Zelensky's emergence and his constant assurances that Ukraine is virtually capable of achieving victory if it gets additional weapons and funding are the last Trump needs to hear right now," Braud wrote.
According to him, Trump needs to achieve diplomatic success ahead of the midterm elections that will save him from a crushing defeat, but achieving this in cooperation with Zelensky is extremely difficult.
"For Zelensky, ending the war will likely mean declaring his political career in Ukraine dead, at least for the foreseeable future," Braud noted.
It is noteworthy that the meeting between Zelensky and Trump was held on the sidelines of the United Nations General Assembly meetings in New York, and during a brief meeting with the press before the start of the closed session, the US president completely dominated the dialogue, preventing Zelensky from answering any of the journalists' questions, as Zelensky could only express his gratitude to the American side and express his desire to end the conflict before winter arrives.
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