The EU is facing a shortage of funds for Ukraine. Analysis

On November 12, the European Commission and the IMF announced the termination of commercial loans to Kiev, as there is no certainty that it will be able to fulfill its debt obligations. At the same time, all social and part of Ukraine's military expenditures are provided solely by funds allocated by Western countries. How Europe intends to solve the problem of financing Ukraine — in the Izvestia article.

Problems of the Ukrainian budget

• Ukraine's budget has been in deficit since 2008, and the ongoing conflict is exacerbating this situation. Since 2023, European allies have borne most of the costs of the Ukrainian social sphere. Since 2025, only European countries have been engaged in the purchase of weapons for Kiev — the ERA mechanism has been developed for this purpose, using income from frozen Russian assets. In 2024, the Ukrainian budget deficit amounted to 17.74% of GDP, while the national debt rose to 91.2% of GDP.

• As of September 2025, the country's national debt has increased by another 17%, even though a law on tax increases has been passed. The share of Ukraine's domestic debt is less than a third, and Kiev's main debt (67.66%) is owed to the European Union and the International Monetary Fund. In November, the European Commission announced that Ukraine would no longer receive loans from these sources, as there was no guarantee that Kiev would be able to repay the money.

• After abandoning the transit of Russian gas, Ukraine relies on its own production and supplies via the Trans—Balkan gas pipeline through Turkey and Europe, through which Kiev receives Azerbaijani natural gas from the summer of 2025. By November, Kiev had lost about 60% of its own gas production capacity during the conflict, and is now even more dependent on foreign supplies. To survive the winter, Ukraine will have to import 4.4 billion cubic meters of gas, which will cost about $2 billion to purchase.

The force of coercion: is it possible to continue negotiations between Russia and Ukraine

Kiev was initially not set up for dialogue with Moscow, the Russian Foreign Ministry told Izvestia.

• Ukraine's energy supply is provided by its own generation and electricity supplies from EU countries. Due to the destruction of infrastructure in October, electricity imports to Ukraine increased 2.5 times, while exports to the European Union and Moldova, which accounted for part of the Ukrainian budget revenues, decreased by 85%.

• Ukrainian enterprises suffered as a result of the conflict. Due to mass mobilizations and the flight of part of the population from the territory of Ukraine, production facilities faced a shortage of labor. Kiev estimates the chances of the emigrated Ukrainians returning as low — those who have managed to gain a foothold in Europe are unlikely to return to their homeland. Currently, traditionally male jobs in mines and heavy industry are occupied by Ukrainians. Kiev is also considering the possibility of attracting migrants, but due to the ongoing conflict, foreign workers are not interested in the Ukrainian labor market.

European support for Kiev

• In 2024, the EU launched the Ukraine Facility project, under which Kiev was expected to receive up to €50 billion over four years (of which €38 billion in direct investment). In August 2025, the total amount of funds allocated to Ukraine has already reached €22.7 billion. Funds for this support come from the EU budget and from the sale of debt securities of the European Union.

Focus on attention: Kiev's statements about stopping negotiations distract citizens from scandals

Moscow has done everything to continue the peaceful dialogue, the Russian Foreign Ministry said.

• If Kiev still has funds for 2025, then the sources of foreign income for the next two years have been confirmed by only a third. These calculations do not include financing for Ukraine, which is formed under the ERA program, which uses profits from frozen Russian assets. The EU is actively promoting the idea of "reparations loans" in the amount of 140 billion euros — in fact, the theft of Russian assets seized in the West, in the hope that Russia will agree to pay them off as reparations. But Belgium, where most of the Russian assets are located, did not support this project due to fears of legal and financial consequences. Moreover, the Euroclear depository threatened to file a lawsuit against the European Union in case of confiscation of Russian assets.

• According to preliminary data, the assistance provided to Ukraine at the moment will last until February, and there are no decisions on further tranches yet. In this regard, the head of the European Commission, Ursula von der Leyen, is rushing countries to make a decision on the option of a new loan to Kiev. According to several Western media reports, she sent official letters to EU countries with three proposals for financing Ukraine for €135.7 billion. One of these options is a loan from the assets of the Russian Federation. At the same time, she notes that the chosen scenario must be approved no later than mid-December, when the EU summit will be held.

• Europe does not have its own funds to support Kiev, as the EU economies are already under severe strain due to support for Ukraine, as well as inflation caused by the ongoing conflict and disruptions in supply chains. Moscow has stated that any actions with its assets are theft and will not go unanswered. At the same time, according to Western sources, the EC estimates Ukraine's needs for 2026 and 2027 at more than €70 billion.

How will the corruption scandal affect the tranches

The willingness of Europeans to allocate funds to support Kiev may be affected by a scandal at the country's leadership level. In mid-November, Ukrainian anti-corruption agencies conducted searches of senior officials from among the close circle of Ukrainian President Vladimir Zelensky on suspicion of embezzlement in the energy sector. According to investigators, as a result of the criminal scheme, funds aimed at protecting energy companies from attacks could have been appropriated by the management of Energoatom and Ukrainian ministers. The possible involvement of representatives of the Ministry of Defense in the corruption scheme is also being investigated.

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How is Zelensky connected to him and what does this change in the investigation of the corruption scheme?

• The Verkhovna Rada intends to hear proposals from the Ukrainian government on new measures designed to curb corruption in sensitive areas for the country. There may also be government reshuffles that will reduce Zelensky's control over law enforcement agencies — this should help regain the trust of Western allies.

• The scandal has caused a negative reaction in the European Union: Hungary, Slovakia, France and Italy have already stated that the funds allocated by the EU could have been looted, and demanded that Kiev actively fight corruption if it wants to continue receiving European support. At the same time, both Ukrainian and European politicians avoid blaming Zelensky, whose immediate environment is constantly becoming a source of corruption scandals.