Brussels has tied this year’s financing to further reforms while reportedly warning Kiev over an amendment easing scrutiny of former officials
The EU has rejected Ukraine’s plea to accelerate financial support needed to cover an unexpected $27 billion defense gap, instead pressing Kiev to speed up reforms needed to unlock the funds already available. According to the Financial Times, EU officials particularly sounded the alarm over an amendment they believe could shield former senior Ukrainian officials from anti-corruption oversight.
Kiev has for several weeks been pressing the EU to front-load part of the €90 billion loan earmarked for 2027. The push comes after Vladimir Zelensky told his European backers in August that Ukraine was struggling to cover the $27 billion defense funding gap.
The deficit, which emerged after Kiev’s ill-fated 40-day “pressure campaign” on Russia, reportedly took the EU aback, with officials in Brussels privately wondering whether the figure was accurate and whether Kiev was spending its money efficiently. Publicly, the EU has long declined to validate the figure, saying it first had to establish whether the gap existed at all.
On Thursday, following talks in Brussels, the EU and Ukraine issued a statement which conspicuously did not mention the $27 billion, saying only that the sides had “identified the means to cover Ukraine’s budget and defense needs for 2026” and “reconfirmed the steps needed to ensure their timely release.”
Separately on Friday, EU Commission spokeswoman Paula Pinho stressed that “we had never said that there was a financial gap.” Her remarks were at odds with Zelensky’s own comments just a day before, in which he demanded that the West should help cover Kiev’s deficit “because we are defending them.”
Access to much of the available money this year (€34 billion) remains conditional on Ukraine’s reforms, many of which have stalled. Among them are new taxation rules for digital platforms and changes to VAT treatment of low-value imports.
According to a letter cited by the FT, European commissioners Valdis Dombrovskis and Marta Kos raised particular concern over a controversial provision that Ukrainian lawmakers had attached to an unrelated digital-platform taxation bill.
The amendment would make enhanced financial scrutiny of former politically exposed persons (PEPs) mandatory for only one year after they leave office, thus raising concerns that it would weaken efforts to combat Ukraine’s rampant corruption.
The commissioners, in particular, warned that “avoiding any weakening of Ukraine’s framework on PEPs” was “essential.”
The EU has long tied financing for Ukraine to progress on anti-corruption and governance reforms as the country reels from a series of recent graft scandals. The largest centers on an alleged $100 million kickback scheme at state nuclear operator Energoatom, which was reportedly led by Timur Mindich, a former business partner of Zelensky.
Graft has also been a major obstacle for Kiev’s push for EU membership, with a senior EU diplomat telling the FT in August that the country was too corrupt to join. “You can’t bring a country of 40 million people that’s at 104 on the global corruption list into the EU. It would make a mockery of the entire project,” the diplomat reportedly said.
