FT: EU Urgently Seeks $19 Billion For Ukraine
- 8.07.2025, 13:15
There are several options.
Brussels is urgently exploring ways to cover a deficit of up to $19 billion in Ukraine's budget next year. Kiev is facing declining US support and worsening prospects for a ceasefire with Russia.
The Financial Times reports.
The publication says the European Commission is discussing options with EU member states, including channeling military support to Ukraine in the form of off-budget grants, advance loans from the existing $50 billion G7 support scheme for Kiev and further utilizing Russian state assets frozen in the EU.
Ukraine's projected budget deficit next year has yet to be covered by external funding.
"There is growing anxiety about next year and many stakeholders who were counting on a ceasefire agreement this year [to ease Ukraine's financial strain] are having to recalculate their spending and realize that there is a [financial] hole, however they try to reduce it," said a senior EU official involved in talks with Kiev.
The European Commission has already had to adjust spending from Ukraine-related funding streams through 2025, officials told the Financial Times, in response to the protracted conflict and lack of certainty about an imminent ceasefire with Moscow.
Conference in Rome
The urgency in Brussels to find new funding is linked to an upcoming summit in Rome this week on financing Ukraine's reconstruction needs, which will be attended by European Commission President Ursula von der Leyen.
The IMF estimates that Ukraine's financing needs for next year are covered, but that assumes the war ends this year or in mid-2026, a scenario that Ukraine and the EU do not share.
The IMF's managing director, Kristalina Georgieva, said last month that the Fund would "assess whether this financing gap will widen and require additional external aid financing."
The aim is to ensure Kiev's needs are met well before winter, especially given the uncertain prospects for further U.S. military support, an EU diplomat said.
Military aid
One proposal shared by Kiev with G7 countries and under consideration by the European Commission is to channel military support to Ukraine in the form of bilateral grants that would be accounted for separately as an "off-budget external transfer" while counting against national defense spending targets.
This would serve the dual purpose of promoting NATO's pledge to increase national defense spending to 5 percent of GDP and providing support to Ukraine.
"Rather than duplicating capabilities, European allies could jointly fund Ukrainian forces - seeing it as a service Ukraine provides to strengthen continental security," Kiev wrote in a document provided to G7 allies and published by the Financial Times.
The commission was due to discuss this and other options with EU finance ministers on Monday night, two people familiar with the matter said.
"Obviously the military support for Ukraine that member states are providing is not only for Ukraine's defense, but also for Europe's defense, and part of that would of course count as defense spending," said one senior EU diplomat.
Other Options
Another option is to expect repayments from the existing $50 billion G7 scheme, which provides Kiev with loans based on profits from Russian state assets frozen in the West.
Without a ceasefire to stimulate Ukraine's domestic economy, Kiev expects a deficit of at least $8 billion in 2026, even if some of the promised sums can be provided by partners including the EU, Japan and the United States. If this does not happen, the financing gap could reach $19 billion.
Another option could be to extract more value from Russian assets by reinvesting them in riskier asset classes. In doing so, a way is being worked out to share responsibility for potentially larger financial losses that would not make Belgium, where most of the assets are held, solely responsible for them.
"We are exploring these options, including the possibility of further use of Russia's immobilized assets," EU Economy Commissioner Valdis Dombrovskis said last month.