budget gap<\/a> next year is not yet covered by external financing.<\/p>\n\u201cThere\u2019s growing concern about next year and many stakeholders that were banking on a ceasefire deal this year [to ease Ukraine\u2019s fiscal strains] are having to recalculate their outlays and realising that there\u2019s a [financing] hole whichever way they to try to slice it,\u201d said a senior EU official involved in discussions with Kyiv.<\/p>\n
The commission has already had to adjust outlays from Ukraine-related funding streams during 2025, officials told the Financial Times, in response to the extended conflict and lack of confidence in an imminent ceasefire with Moscow.<\/p>\n
The urgency in Brussels to rustle up fresh funding comes ahead of a summit focused on funding Ukraine\u2019s reconstruction needs in Rome later this week, which European Commission president Ursula von der Leyen will attend.<\/p>\n
The IMF estimates that Ukraine\u2019s financing needs for next year are covered, but that is premised on the war ending this year or in the middle of 2026 \u2014 a scenario which Ukraine and the EU do not share.<\/p>\n
![\"Ukrainian](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/07\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/e090395c-422a-4260-8069-dbf881a9c8b1.jpg\")
Ukrainian troops on the lookout for Russian drones near the front line at Kostiantynivka in Donetsk region on Saturday \u00a9 Viacheslav Ratynskyi\/Reuters<\/p>\n
IMF managing director Kristalina Georgieva said last month that the Fund \u201cwill assess whether this financing gap is going to increase and will require further financing on the external aid\u201d.<\/p>\n
The goal is to ensure that Kyiv\u2019s needs are covered well in advance of the winter, especially given the uncertain prospects for further US military support, said one EU diplomat.<\/p>\n
One proposal, shared by Kyiv with G7 countries and under consideration by the European Commission, is to channel military support to Ukraine as bilateral grants that would be accounted for separately as an \u201coff-budget external transfer\u201d, while at the same time counting towards national defence spending targets.<\/p>\n
This would serve the double goal of contributing to Nato pledges to increase national defence spending to 5 per cent of GDP while providing support to Ukraine. \u201cInstead of duplicating capabilities, European allies could co-finance Ukrainian forces \u2014 treating it as a service Ukraine provides to enhance continental security,\u201d Kyiv wrote in a paper shared with G7 allies and seen by the Financial Times.<\/p>\n
The commission was set to discuss this and other options with EU finance ministers on Monday evening, two people familiar with the matter said.<\/p>\n
\u201cClearly the military support for Ukraine that member states are giving are not only funds for the defence of Ukraine but for the defence of Europe, and some of that of course will count as defence spending,\u201d said one senior EU diplomat.<\/p>\n
Another option is to anticipate disbursements from an existing $50bn G7 scheme that issues loans to Kyiv on the back of profits from Russian state assets immobilised in the West.<\/p>\n
Without a ceasefire to boost Ukraine\u2019s domestic economy, Kyiv expects a shortfall of at least $8bn for 2026 even if some of the pledged amounts can be brought forward, from partners including the EU, Japan and US. If that does not happen, then the financing gap could reach $19bn. <\/p>\n
A further option could be to extract more value from the Russian immobilised assets, by reinvesting them in riskier asset classes \u2014 while devising a way to share responsibility for potentially greater financial losses that would not make Belgium, where most of the assets are held, solely liable for them.<\/p>\n
\u201cWe are exploring those options including the possibility to further leverage the use of Russia\u2019s immobilised assets,\u201d EU economy commissioner Valdis Dombrovskis said last month.<\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the War in Ukraine myFT Digest — delivered directly…\n","protected":false},"author":2,"featured_media":247318,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7654],"tags":[2000,299,657],"class_list":{"0":"post-247317","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ukraine","8":"tag-eu","9":"tag-europe","10":"tag-ukraine"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114816245094737561","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/247317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=247317"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/247317\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/247318"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=247317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=247317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=247317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}