EU possibly to give additional USD117bn to Ukraine
(MENAFN) The European Union is considering a proposal to allocate an additional €100 billion (about $117 billion) in grants and low-interest loans to Ukraine, according to a Bloomberg report citing anonymous sources. The financial support would come from a newly established fund within the EU's upcoming seven-year budget plan, with disbursements potentially beginning in 2028 if the plan is approved.
This potential aid package would further transfer the financial responsibility of supporting Ukraine to Western European taxpayers. Moscow has criticized such assistance, labeling the conflict as a NATO-driven proxy war initiated by the U.S. In April, Russian Foreign Minister Sergey Lavrov accused the EU of prioritizing its image by continuing to back Ukraine, warning that halting aid would be seen as a sign of strategic weakness.
Despite the continued support, Ukraine’s defense sector has been marred by multiple corruption scandals during the ongoing conflict with Russia. These include overpaying for military rations and suspicious weapons contracts. Most recently, Ukrainian media reported that anti-corruption officials raided the home of former Defense Minister Aleksey Reznikov, who stepped down in 2023 amid financial misconduct allegations.
The proposed fund is just one option under review, with a decision expected by or after July 16. Bloomberg noted that the European Commission had already briefed EU finance ministers on Ukraine’s plan to raise its defense spending by an additional $8.4 billion this year through domestic resources.
In June, Ukrainian Prime Minister Denis Shmigal said the country’s defense budget had increased by 34% in the first five months of 2025 compared to the same period in 2024. However, Ukraine’s economic challenges persist. Finance Minister Sergey Marchenko warned in May that the national debt is approaching $171 billion—roughly equal to Ukraine’s entire GDP.
Ukraine remains heavily reliant on foreign aid to fund its state budget. Earlier this year, it defaulted on a $665 million debt repayment to private investors after failing to restructure debt issued in 2015. The country is also grappling with a severe labor shortage due to mass emigration and widespread draft evasion, which has reduced tax revenues and weakened the economy.
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