EU to freeze some Ukraine funding unless anti-graft agencies' independence is restored, media reports
The EU has warned Kyiv through diplomatic channels that it will freeze some financial assistance if a bill restoring the independence of Ukraine's principal anti-corruption bodies is not passed, European Pravda and Ukrainska Pravda reported on July 29, citing undisclosed sources.
The Ukrainian parliament is set to vote on the new bill on July 31 after another legislation, passed last week, effectively destroyed the independence of the National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAPO).
EU sources told European Pravda that if the controversial legislation curtailing the independence of anti-graft agencies is not rolled back, the EU would halt funding under the G7's Extraordinary Revenue Acceleration (ERA) loan, a financing program covered by frozen Russian assets.
The EU is shouldering roughly $20 billion of the $50 billion allocated to the ERA by G7 members.
Funding via the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) would also reportedly be paused.
The freeze would not, according to European Pravda, concern funds allocated under the EU's Ukraine Facility program, even though the next tranche under the initiative was reduced from 4.5 billion euros ($5.2 billion) to 3.05 billion euros ($3.5 billion) due to delays in other reforms.
Conversely, Ukrainska Pravda reported that the Ukraine Facility funding may also be paused, though this step would be more difficult to implement due to legal constraints.
EU officials informed Prime Minister Yuliia Svyrydenko's government about the decision on July 24, saying that "everything has been put on hold until the situation is corrected," Ukrainska Pravda reported, citing its sources.
Last week, the European Commission publicly denied that funding cuts are being considered in response to the new bill.
The EU has been Ukraine's main supporter during Russia's full-scale invasion. The bloc and its member states have provided $180 billion in military, economic, and humanitarian aid to Kyiv since 2022.
The bill 12414, which was swiftly passed by the parliament and signed by President Volodymyr Zelensky on July 22, grants the prosecutor general sweeping new powers over NABU and SAPO.
The legislation was met with backlash at home and abroad as it was seen as rolling back some of the key achievements of the post-EuroMaidan anti-corruption reforms.
Following EU criticism and mass protests across Ukraine, Zelensky announced that the new bill restoring the agencies' independence was submitted to the parliament on July 24.
EU leaders have also signaled that the controversial legislation could hamper Ukraine's accession efforts. Kyiv applied for EU membership in 2022, and the initial negotiations were formally launched in mid-2024.
Hungary, the most Moscow-friendly EU government, has thus far blocked the opening of the first negotiations cluster with Ukraine, making any progress in the near future uncertain.
