Exclusive: Ukraine has few options if Hungary keeps EU funding frozen
A soldier smokes a cigarette in a trench at a position near Zaporizhzhia, Ukraine, on Feb. 22, 2026. (Dmytro Smolienko/Ukrinform/NurPhoto via Getty Images)
on GoogleUkraine has no good options to replace a crucial cash package from the European Union, which Hungary continues to block, leaving Kyiv hurtling towards a hole in its finances as it awaits a solution to the impasse.
The loan, agreed unanimously by EU countries at a summit in December, would provide 90 billion euros ($103 billion) to Ukraine over 2026–2027, covering two-thirds of the country's financial and military needs. But Hungarian Prime Minister Victor Orban has since U-turned, ostensibly over a dispute pertaining to Russian oil transit through Ukraine.
A recent $1.5 billion transfer from the International Monetary Fund and help from Japan — which is front loading over $1 billion in funds that were originally scheduled to arrive later in the year — will keep Kyiv's finances afloat until the end of spring, according to Ukrainian officials familiar with the country's finances.
But a top Ukrainian official, speaking with the Kyiv Independent on the condition of anonymity, said that there was no "reliable alternative option" beyond the spring, unless the European money starts flowing — and added that domestic measures such as additional debt would be costly.
Oleksandra Myronenko, economist at Ukrainian think tank Center for Economic Strategy, told the Kyiv Independent that domestic debt is a "really limited resource."
"We have little capacity to raise more domestic debt. This year, we actually planned to repay more than to borrow on the internal debt market. The only resource we are relying on is the 30 billion euros from the European Union," she said, referring to the component of the EU loan earmarked for budgetary needs.
Furthermore, roughly $6 billion in funding from the World Bank and the Ukraine Facility, an EU funding program, could be delayed, as the country's parliament struggles to pass the necessary reforms to unlock the cash amid a parliamentary crisis.
Ukrainian officials speaking to the Kyiv Independent all said that the focus remained on securing the European funds, with one official telling the Kyiv Independent that Brussels and Kyiv are meeting twice a week to plan for the arrival of the cash in April.
"Together with EU colleagues, the Finance Ministry is actively working to secure these funds. Ukraine has assurances from EU partners that the first tranche will be available in the second quarter of 2026," Ukraine's Finance Ministry said in a statement to the Kyiv Independent
Politico reported that a consortium of Nordic and Baltic countries could provide bilateral support to Ukraine to keep the cash-strapped country's finances afloat until the 90 billion euros loan arrives.
However, the Kyiv Independent has since learned that there are ongoing concerns within the EU that planning alternatives to the loan would mean accepting and normalizing Hungary's blackmail.
Estonia's Foreign Ministry also told the Kyiv Independent that it is not aware of any alternative solutions and said the focus should be on advancing the 90 billion loan.
European leaders will gather in Brussels on March 19–20, where they are likely to try and convince Hungary and Slovakia — who has also threatened to back-track on the December agreement — to green-light the loan.
Foreign support is key for Ukraine. Since the beginning of the full-scale invasion, the country has relied on colossal injections of foreign cash for both financial and military needs.
The U.S. was a significant donor to Ukraine under former President Joe Biden, but aid has all but evaporated under the second Donald Trump administration. Kyiv now mostly relies on the EU, with support from other key partners like Japan, the U.K., Canada, and Norway. The country has received $5.3 billion since January 2026, according to Ukraine's Finance Ministry.
Hungary first stalled the loan over a dispute related to the Druzhba oil pipeline, which runs from Russia through Ukraine.
Orban, trailing in the polls ahead of an election on April 12, is making opposition to Ukraine and the EU a centerpiece of his campaign strategy. He has said he will not unblock the loan until oil starts flowing through the Druzhba pipeline, which Ukraine says was damaged in a Russian air strike in late January.
"Support from international partners remains an important element of Ukraine’s financial resilience in 2026," Ukraine's Finance Ministry said in a statement to the Kyiv Independent.
"In this context, the European Union’s decision on a support package of 90 billion euros for 2026–2027 is extremely important. It provides Ukraine with confidence regarding budget liquidity, particularly in the current year."
Martin Fornusek contributed reporting.
