Ukraine's finances: everything we don't know

BRUSSELS, Belgium — Ukraine, the EU, the IMF, and G7 partners were all in Brussels on Sept. 29 to discuss the state of Ukraine's finances until the end of 2027, but a sense of who will pay what, and how much money is even needed, remains elusive.

"Our idea is to secure some possible solutions in a way which helps us to meet our needs in 2027," Finance Minister Serhii Marchenko said at an event organized the day before by the European Policy Center (EPC) think tank.

And there is a common understanding that Ukraine has significant financial needs.

When the EU finalized its 90 billion-euro ($102 billion) loan to Ukraine in April 2026, it was explicitly clear that it was intended to cover only two-thirds of Kyiv's total budgetary needs until the end of 2027.

Contributions from third countries were expected to fill in the remaining third, but aside from a $9 billion pledge for 2027 from Norway, this has not happened.

"We need to shoulder the financing challenge ahead together," the EU's Enlargement Commissioner Marta Kos told attendees of the Sept. 29 Ukraine Donor Platform meeting, according to excerpts of the closed-door speech provided to the Kyiv Independent.

"The European Union will be doing its part. But we need sufficiently ambitious commitments from everyone," Kos said.

But even understanding how much everyone needs to contribute is getting complicated. The calculation of 45 billion euros ($51 billion) remaining outstanding, minus the Norwegian contribution, should leave Ukraine short of around 37 billion euros ($42 billion) until the end of 2027.

Nailing jelly to a ceiling

On Aug. 24, President Volodymyr Zelensky said Kyiv had a $27 billion budget shortfall for 2026 and publicly called on the EU to frontload payments earmarked for 2027 already in 2026.

However, Ukraine never formally requested that the EU carry out that maneuver, then or since.

Never entirely explained: the gap itself. Marchenko mentioned that it was part salaries for troops, and part drone procurements, during the EPC event.

But he also said "we can manage the budget this year, and we have some scenarios for how we can react in this year's budget," suggesting the hole has been resolved.

"Unfortunately, we still have an uncovered gap for 2027," Marchenko said.

But Prime Minister Serhii Koretskyi said that only around $7 billion could be clawed back from the $27 billion shortfall for 2026 via cost-cutting measures, during a press briefing with journalists on Sept. 28.

“The remaining $20 billion is the subject of negotiations with partners," Koretskyi said.

Marchenko also pointed to several budgetary surprises during his panel event, which illuminate how difficult it can be to predict finances in a country at war.

"For the first time since 2022, we realize that we have underperformance in our tax and customs administrations," Marchenko said, noting a 400 million euro ($454 million) projected shortfall for September.

He also mentioned the ongoing blockage of agricultural exports via the Black Sea.

"We are capable of exporting only 40% of our grain … it's a challenge because we can't receive sufficient money from exports to help our budget."

And the evolving needs of Ukraine's defense also play a role. Marchenko listed the costs of the Operation Vivaldi counteroffensive and the need to rapidly develop interceptor technology to take out Russia's jet-powered Shahed drones, as examples.

The European Commission's reaction to this ever-shifting situation remains fairly consistent, with spokesperson Balazs Ujvari telling the Kyiv Independent that there are "three key messages."

"First, Ukraine needs to continue to reform. Second, our international partners need to step up to the plate with concrete pledges, and third, we have to start gearing up for 2027."

And to address the looming budget gap of 2027, Ujvari notes that Kyiv and Brussels need to agree on the financial strategy for that year.

"The sooner we have this document, the final version from Ukraine, the better it is. We can go ahead and adopt it, and that will give predictability as regards next year," Ujvari said.

Marchenko met with the EU's Economy Commissioner Valdis Dombrovskis later that day to discuss reforms and the 2027 financing strategy.

Few seem serious about filling the hole

Regardless of how large Ukraine's budgetary gap ends up being, there is no dispute that one will exist.

Even so, repeated requests from the EU and Ukraine for other countries to step up their contributions have failed to bear fruit, and no new pledges came out of the Sept. 29 Donor Platform meeting, even though G7 countries were in attendance.

In terms of EU support, there are ongoing conversations around frontloading 2027 payments of the 90 billion loan earlier in the year, but this does not increase the amount of funding available, it merely provides short-term relief at the expense of the second-half of next year.

And discussions about various mechanisms for using Russia's more than 200 billion euros ($227 billion) in assets immobilized in Europe to help Ukraine have likewise failed to make headway so far.

Closer to home, lawmakers also don't all seem particularly serious about solving the challenge.

Marchenko all but ruled out raising taxes, saying, "I am not sure that this is the right time,"and expressing fear of the pressure it would add to businesses.

"We should find a way … how to combat our shadow economy," Marchenko suggested, but without providing details on how.

Two weeks before, Kos and Economy Commissioner Valdis Dombrovskis co-signed a letter to the parliament in Kyiv, reminding of 21 previously agreed reforms that Ukraine could pass by the end of the year, and in doing so unlock over 20 billion euros ($22.7 billion) in financial support.

Kos also reminded of the importance of carrying out reforms in her Sept. 29 speech.

"Substantial EU financing remains available still this year, if reforms are delivered. This will require unity inside Ukraine," she said.

Koretskyi told journalists that there is $29.5 billion "we risk not receiving to the budget from international partners if we do not fulfill the obligations we have undertaken."

At a press conference on Sept. 23, Zelensky defended the parliament, telling journalists that "it's impossible to calculate that the parliament will work the way it works in a normal country in a normal non-military time."

"It's a fact. The parliament does not work in an unconditional format 24 hours a day. That's it," Zelensky said.

"Let's be flexible, because we have a war," he added.

But the parliament's sense of urgency falls far short of what Zelensky's comments suggest, with its next meeting scheduled only for Oct. 12, a month after the last one.

"Of course we know it's a very difficult situation there," Ujvari told journalists.

"There's a war of aggression and it's very difficult to operate in … but at the same time there is a jointly agreed reform agenda … these need to be pursued," Ujvari said.

Koretskyi said the government is working to "fulfill all its obligations by Oct. 15," but that the parliament needs to pass laws.

"We are working with the Verkhovna Rada to make Oct. 12 also a session day to vote on the bills needed to receive these funds," Koretskyi said.

"For Ukraine, time is very short now," he added.