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The IMF and the European Commission assess how large Ukraine’s budget deficit will be next year
/ photo ua.depositphotos.comThe European Union is calling on international partners to accelerate financial aid to Ukraine amid a growing budget deficit and a tense front-line situation, Bloomberg reports.
"When we proposed a loan to support Ukraine, the idea was that it would cover about two-thirds of Ukraine’s financing needs, and the other third would be provided by other international partners," said Valdis Dombrovskis, EU Commissioner for Economics, after a meeting of EU finance ministers in Dublin, which was also attended by their counterparts from the United Kingdom, Switzerland and Canada.
Bloomberg recalled that earlier this year the EU approved a package of loans totaling 90 billion euros to support Kyiv over 2026–2027 years, but military expenditures have already led to a deficit of about 27 billion dollars. The International Monetary Fund together with the European Commission assess how large Ukraine’s budget deficit will be next year.
Against this backdrop, the EU is calling on other countries, notably the United Kingdom and Japan, to provide financial support. According to sources familiar with the situation, this will be one of the main items on the agenda of EU representatives during meetings with colleagues in New York next week at the UN General Assembly.
Ukraine’s Finance Minister Serhiy Marchenko, who also attended the Dublin meeting, said that the deficit of financing in 2027 year could be at least 32 billion dollars. At the same time, international partners of Ukraine are still assessing these figures.
"Ukraine faces greater financing needs as Russia’s aggression, if anything, intensifies. In a relatively short time, we have to determine the size of this deficit," emphasized Dombrovskis.
The EU Commissioner also acknowledged that negotiations on providing financial support will proceed more smoothly if Ukraine implements the reform plan agreed with donors.
Any progress in implementing reforms and obtaining financial support from third countries will also help attract additional funds from EU member states, the agency’s sources added.
As Bloomberg notes, some EU member states have returned to the idea of using part of frozen assets of the Russian central bank in Europe amounting to 210 billion euros, while others believe that issuing additional joint bonds could be an effective solution.
Ukraine’s budget deficit – latest news
Earlier, Prime Minister Serhiy Koretsky said that Ukraine faces a large-scale reduction in expenditures due to delays in Western aid. He said Ukraine would have to substantially cut spending from the current budget if lawmakers do not approve unpopular measures necessary to secure billions of dollars of Western assistance before winter.
Head of the Verkhovna Rada Budget Committee Roksolana Pidlasa stressed that due to a lack of funds the government will not be able to finance preparations for the winter energy season. She said the Ministry of Finance has pushed funding for energy system preparations to December.
Pidlasa also noted that state finances remain under significant pressure and the budget collection situation is tight.
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