Brussels sets December deadline to fix Ukraine’s money problems

 

Brussels sets December deadline to fix Ukraine’s money problems

 

The war-ravaged country faces a budget shortfall of €70 billion next year.

 

October 22, 2026 3:43 pm CET

By Bjarke Smith-Meyer

https://www.politico.eu/article/brussels-sets-december-deadline-to-fix-ukraines-money-problems/

 

BRUSSELS — The European Commission wants to figure out how to plug Ukraine’s budget hole by year-end, according to a document seen by POLITICO.

 

“Work should start on finding solutions for the remaining funding gap for 2027, with the aim to reach a political agreement before the end of the year,” the three-page document read.

 

The deadline emerged after European Union leaders met in Brussels last week to discuss the bloc’s next seven-year budget and Ukraine, among other things.

 

The war-ravaged country faces a budget shortfall of €70 billion next year despite fresh funds coming from a €90 billion loan that leaders agreed in December 2025. Without that extra cash, Ukraine’s government and military will struggle to keep up its four-year defense against Russian forces.

 

Ukraine’s gap in defense spending amounts to €40 billion, and the remaining €30 billion shortfall stems from its national budget. Commission officials hope Canada, Japan, the U.K. and the U.S. will help bring the total amount down.

 

“International partners should fulfil their financial commitments and step up their efforts … in light of the significant challenges Ukraine is facing,” the document read. “Decisive engagement is needed to mobilise further support and sustain Ukraine’s defence effort and essential state functions, throughout next year.”

 

The defense gap could drop to €27 billion if NATO countries stick to their pledge of providing Kyiv with bilateral assistance this year and next, agreed July 8 in Ankara.

 

That said, the numbers “remain subject to a very high level of uncertainty, particularly on the defence side,” the document noted. So, it could get worse.

 

The EU executive is preparing a list of financing options for Ukraine that leaders are expected to discuss when they next meet in Brussels for an extraordinary summit on Nov. 26.

 

Three EU officials said it’s unlikely that frozen Russian state assets will be among the financing options. Belgium remains opposed to the initiative, as most of the assets reside in the Brussels-based financial depository Euroclear. Without unconditional support, the Belgian government fears that leveraging the assets would invite Russian retaliation at home and abroad.

 

Given how little time is left to agree on Ukraine’s financing needs by the end of the year, it’s unlikely the Commission will invite another political battle over the Russian assets.

 

Fraught negotiations over the EU budget could also push the financing question to early next year, especially as Ukraine’s coffers won’t deplete immediately.

 

“It’s not a hard, hard deadline,” one EU official said.