Ukraine has trimmed its projected budget shortfall for the year from $27 billion (€23.7 billion) to $20 billion (€17.6 billion) through a round of austerity measures, Prime Minister Serhii Koretskyi said on Sunday. But he cautioned that the remaining hole in the state finances is still far from being plugged.
Speaking to the TSN news outlet, Koretskyi explained that the cuts will hit areas such as road repairs and cultural projects, while salaries for the armed forces will remain untouched. “We are looking for optimisation and redistributing available sources to set priorities. The armed forces are the top priority for all of us,” he said.
The prime minister stressed that every spending decision is now judged by a single criterion: “The priority is whether it leads to survival or not. This is the only approach to making certain decisions.”
Kyiv is currently in talks with the European Commission, the International Monetary Fund, and other allies over how to cover the deficit, which affects the Ministry of Defence and risks delaying essential weapons deliveries. The urgency has grown following Russia’s recent escalation in the conflict.
“With joint efforts, we have not yet found a way to cover these expenses,” Koretskyi admitted, underscoring the scale of the challenge.
No new money, just existing war costs
The prime minister insisted that the $27 billion figure was not a request for fresh funds. Rather, it represents the portion of Ukraine’s annual war costs—estimated at $155 billion (€136.3 billion)—that Kyiv had already communicated to allies in February. A similar assessment was sent to the European Commission as Brussels prepared its €90 billion support loan, which has been split evenly between 2026 and 2027, with payments already underway.
Ukrainian officials have floated the idea of frontloading a share of that loan to ease the immediate crunch, but doing so would leave less money next year and could worsen the situation. Commission officials are still trying to pin down the precise extent of the deficit and have urged Ukraine to accelerate reforms to unlock roughly €20 billion in financial aid available this year.
On Tuesday, Brussels will host a new meeting of the Ukraine Donor Platform, bringing together representatives from allied nations and financial institutions. The gathering comes as EU defence ministers convene in Brussels to discuss Ukraine aid, with the funding shortfall dominating the agenda.
The search for solutions is complicated by the broader European context. While the EU has pledged significant support, some member states are facing their own fiscal pressures. For instance, Spain has gone 1,000 days without a new national budget, highlighting the political difficulties of committing new funds. Meanwhile, Russia has raised taxes on its citizens and firms to sustain its own war effort, a move that contrasts with Ukraine's reliance on international solidarity.
Koretskyi’s comments come amid a series of Russian attacks on Ukrainian cities, including a recent drone barrage that killed 14 people and hit infrastructure in Kyiv and Odesa. The ongoing violence underscores the need for sustained financial and military support from Europe and beyond.
As the donor platform convenes, the question remains whether allies can bridge the remaining $20 billion gap. For Kyiv, the answer is existential. “This is not about comfort; it’s about survival,” Koretskyi said, reiterating that every decision is made with that stark reality in mind.
