**Ukraine’s 2026 Budget: A Funding Conundrum**
The European Commission is engaged in discussions with EU member states to determine how to fill a significant budget deficit for Ukraine next year. According to the Financial Times, this gap could be as high as $19 billion, although estimates also suggest it might be lower, at around $8 billion.
**Background: International Support**
Ukraine has received substantial financial backing from international partners so far in 2025, with a total of over $39 billion provided. This support is crucial for the country’s wartime economy. However, the reduced U.S. assistance and the lack of a swift ceasefire with Russia have created uncertainty, forcing EU partners to revise their funding plans.
**EU Adjustments**
The European Commission has already made adjustments to its spending related to Ukraine, reflecting the changed circumstances. The commission is now considering providing military aid in the form of off-budget grants that would be recorded separately as external transfers but would contribute toward NATO member countries’ national defense spending targets.
**Potential Support Options**
Other options being discussed include accelerating payments from a $50 billion G7 loan program and reinvesting frozen Russian assets into higher-yielding financial instruments to service debt. These proposals aim to fill the potential funding gap in Ukraine’s budget for 2026.
**International Impact**
The funding issue is expected to be a significant topic at the upcoming Ukraine Recovery Conference in Rome, where European Commission President Ursula von der Leyen will attend. The discussion among EU finance ministers on July 8 and the conference itself are expected to bring further clarity on how Europe plans to support Ukraine’s budget.
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