The EU is urgently seeking up to $19 billion for Ukraine in 2026
The European Union is urgently seeking ways to cover Ukraine's budget deficit of up to $19 billion in 2026, reports Financial Times.
As FT writes, without a ceasefire agreement, Ukraine expects a deficit of at least eight billion dollars in 2026, even if some of the promised amounts are allocated in advance by partners. If this does not happen, the funding gap could reach $19 billion.
"Concerns are growing about the next year. Many interested parties, who have bet on a ceasefire agreement this year, are forced to reassess their expenses and realize that there is a (financial) gap, regardless of how they try to reduce it," said a senior EU official involved in negotiations with Ukraine.
According to the International Monetary Fund, Ukraine's funding needs for 2026 are covered, but only if the war ends this year or in the middle of the next. Ukraine and the EU consider such a scenario unlikely.
According to sources, the European Commission is currently discussing various options with member states.
One idea, which Ukraine shared with the G7 countries and which the European Commission is considering, involves directing military support in the form of bilateral grants. These will be counted separately as "off-budget external transfers," but also for national defense expenditure purposes. This would achieve two goals: contribute to NATO's commitment to increase defense spending to 5 percent of GDP, while simultaneously supporting Ukraine.
"Instead of duplicating capabilities, European allies could co-finance Ukraine's armed forces, viewing this as a service Ukraine provides to strengthen continental security," states a document circulated by Ukraine among G7 allies.
Another option is to wait for payments under the existing G7 scheme, which provides Ukraine with loans funded by profits from frozen Russian assets.
Another possibility could be obtaining additional funds from Russian assets through reinvestment into more risky asset classes.
