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Automatically translated version. May contain inaccuracies compared to the original.
The state entered autumn with a huge budget deficit. The government suspended funding for, say, road repairs, school construction, and resilience plans.
This creates significant risks for the upcoming heating season, which begins in about a month. Resilience plans were developed for each community; these documents are classified and were approved at National Security and Defense Council meetings.
Implementation of the plans was regularly reported to the president. However, reality turned out differently — communities are now essentially left to prepare for winter on their own. For cities with large revenues this will be an unpleasantness but still a manageable task.
Poorer communities, however, risk simply losing time. The government plans to resume payments in December.
The worst situation with money since the start of the full-scale invasion
It seems no prime minister in recent years has made such candid statements about the country’s economic situation. Serhiy Koretskyi reported: the state of public funds is bad. For the first time since 2022 year the state halted a significant portion of budget expenditures. Payments were postponed until the end of the year — in total we are talking about nearly 40 billion UAH. For October and November this amount may still increase.
Prime Minister Serhiy Koretskyi during a briefing with the defense minister on closing an additional defense request for $27 billion this year.
At the same time, protected items (social spending, public-sector wages, etc.) and the defense sector continue to be funded. Although there are also problems with money for the war — more is needed.
“The Ministry of Finance made changes to the state budget schedule and moved some expenditures from September, October and November to December. Primarily these are capital expenditures: construction and reconstruction (for example, hospitals), construction of shelters in hospitals and schools, protection of the energy sector, construction of social housing and others,” says Roksolana Pidlasa, chair of the Verkhovna Rada Budget Committee.
But the main risk is that in December these funds may remain unspent. There may simply not be enough time to carry out the work.
There are two main reasons why the state ran out of money in the autumn. First, Russian strikes on industry and business have reduced tax revenues to the state budget.
This is visible not only from the drop in fiscal collections but also from the situation in the energy sector.
“Electricity consumption has fallen significantly due to continued missile attacks on industry, in particular energy-intensive enterprises of the metallurgical complex, which are halting production. The energy sector is losing large consumers and stable electricity consumption, including during nighttime hours. This will complicate balancing the power system when all nuclear units come out of maintenance and the system has a high baseload,” explains former energy minister Olha Buslavets.
The second reason for the financial crisis is unprofessional actions by the Ukrainian authorities. The state failed to secure the full amount of financial assistance from the EU.
Under the Ukraine Facility loan program, Ukraine must meet conditions and in return receives money from European partners. Each reform costs a certain amount (sometimes hundreds of millions, sometimes a billion). Similar cooperation exists with other donors: the IMF and the World Bank.
If the Verkhovna Rada had timely voted on about four dozen laws during the year, the European Union alone would have transferred up to 30 billion euros to Ukraine. This money is already earmarked to support the Ukrainian budget. The EU is ready to release it, but the problem is the Ukrainian authorities, who are slowing down a number of reforms.
For example, to receive the October tranche of over 4 billion euros, it is necessary to finally approve the law on taxation of parcels from abroad (worth up to 150 euros), change legislation on property valuation, approve the principles for forming a selection commission to choose members of the Accounting Chamber, and also repeal an amendment to the law on financial monitoring of publicly significant persons (it was introduced in summer; the EU opposed it).
And there are several problems here at once: first, many of these laws are politically sensitive even for the presidential faction, where there is no unity in voting. Second, thousands of amendments have already been submitted to some of these bills, so consideration will be delayed. Third, at the height of the country’s biggest financial crisis the Verkhovna Rada took a pause from plenary sessions until almost mid-October.
“We desperately need international reserves. To do that, Ukraine must do its homework. The good news is that everything depends on us. Funding is planned in our partners’ budgets. It’s possible and necessary to receive it, and Ukraine can do it,” says Volodymyr Lepushynskyi, deputy governor of the National Bank of Ukraine.
The government blames MPs, while the Verkhovna Rada is either on holiday or working in committees
The Cabinet of Ministers promises to fulfill all obligations to international partners by 15 October. Serhiy Koretskyi mentions his predecessors and essentially complains about a difficult political legacy.
“The government must finish everything that wasn’t done this year. And unfortunately a lot has accumulated. These are forty-two different documents, resolutions, decisions. And submit laws to parliament,” the prime minister said.
Koretskyi then wants to throw the ball into the Verkhovna Rada’s court. On one hand that’s logical. But on the other — many of the cooperation conditions with creditors were not agreed with deputies by the previous government of Yuliia Svyrydenko, which caused resistance and outrage in parliament.
“If by 13 October the Verkhovna Rada votes for everything it should, we expect to receive 4 billion in macro-financial assistance by the end of the month. This, of course, won’t solve the problem globally, but it will allow gradual financing of something critical,” says Roman Yermolychev, first deputy finance minister of Ukraine.
European Commission President Ursula von der Leyen already speaks plainly: Ukraine has no other way. Only fulfilling previously agreed conditions is the way to get money into the budget.
President Volodymyr Zelenskyy (left) and European Commission President Ursula von der Leyen speak to the media after arriving at the European Council summit in Brussels, 18 June 2026 year.
Attempts by Ukrainian authorities to bypass this principle have not worked. However, Kyiv still has another option — negotiating individually with each EU country. Or attracting other states such as Norway, Canada, Japan, etc.
Did the government really suspend funding of the Resilience Plans?
The Cabinet of Ministers stopped allocating funds for preparation for the heating season. The Association of Cities of Ukraine reported this. The government halted payments for energy protection, implementation of resilience plans and even for addressing the consequences of Russian strikes.
“Community resilience plans in 2026 were not financed by the government even at the previously announced 30% by the former prime minister (Yuliia Svyrydenko, — LB.ua); moreover, the government owes municipal enterprises 85 billion UAH, so implementation is impossible,” the Association of Cities of Ukraine said.
The organization believes the Cabinet of Ministers cannot simply stop payments. According to the law, there should be a Verkhovna Rada decision; no such vote took place. The Association reminds that its members include over a thousand communities from across Ukraine, and now winter preparation there is at risk.
“The government once again proved to communities that it cannot be trusted,” says Oleksandr Kharchenko, director of the Center for Energy Studies. The situation with winter preparation at the local level varies widely. Some mayors took big risks, some even exposed themselves to potential criminal proceedings. Some local leaders, at their own risk, started work before funds were allocated.
“They found contractors who agreed to work on the promise of payment. Those communities will now be in a normal state. There are quite a few of them; they tried to build something on a person’s word. This applies to protection and cogeneration. But contractors who trusted them will see nothing by December. At the end of the year it suddenly turns out that part of the money wasn’t spent and must be rolled over, so it will be as always,” says Oleksandr Kharchenko.
2 cogeneration units in the Lviv region
At the same time, for cities with large budgets this situation did not become catastrophic, the expert adds. We’re talking, for example, about Kyiv or Odesa, although they will also have to reallocate expenses. But things will be bad for poorer communities.
“Let me remind you that the government’s arrangement with the regions was roughly this: the Cabinet took almost all the money to the center and promised to fund 80% of the resilience plans. Except Kyiv, which was promised half, but in fact will get 25%,” explains Oleksandr Kharchenko.
The Cabinet could not completely stop financing winter preparation, believes energy sector specialist Hennadiy Ryabtsev. Certain works from the resilience plans continue to be carried out. After all, funds for them are allocated under separate budget items.
“Capital expenditures that stopped being financed were laid out according to the Law ‘On the State Budget.’ And comprehensive resilience plans were mostly approved in March. Yes, some works may face problems, but most will be completed. Let’s not forget there is also funding through pilot projects and the Energy Support Fund, which are not capital expenditures. This includes physical protection,” says Hennadiy Ryabtsev.
Communities criticize government initiatives
The government considers resilience plans the main element of preparation for the heating season. These documents were supposed to help communities achieve energy autonomy in case of potential issues with electricity and heat supply.
Consequences of a strike on one of the CHP plants attacked by Russians on the night of 3 February
The coordination of forming the resilience plans was handled by regional military administrations, meaning the president’s vertical.
“And what are these resilience plans? There is no methodology for their formation, there is some list of measures. And there is no funding for them; for us they are not financed — I’m speaking about our rear city. It’s mostly a ‘gimmick,’ as they like to call it from a PR perspective. The reality is different: for six years the government has not reimbursed the difference in heat tariffs,” says Ternopil deputy mayor Vladyslav Stemkovskyi.
The official adds that the heat tariff in the city covers only half of costs. For example, the cost of electricity used in calculations is listed as 2.96 UAH per kilowatt. However in winter the price of electricity for the local heat supplier reached 15–17 UAH.
Thus, perhaps the most difficult situation in winter preparation is with heat producers. Enterprises operate under loss-making tariffs; the government does not cover the difference. Recently almost seventy companies faced another problem: their accounts were blocked due to gas debt.
Head of Cherkasyteplokomunenerho, Pavlo Karas.
“Uman, Smila, Bahacheve, Korsun, Kaniv — all these cities have blocked accounts. What is their level of winter preparedness? I answer: zero. Absolutely. Regardless of what they wrote in reports,” said Pavlo Karas, head of Cherkasyteplokomunenerho.
Money is not the only problem; air defense needs strengthening
Resilience plans were meant to be a strategic document by which the government could assess the situation in each community, explains Olena Pavlenko, president of the DiXi Group analytical center. It concerns decentralization of electricity, heat supply, protection of the energy sector and backup generation.
“For some reason people assume these documents should solve everything. For me they are simply a traffic light: is the situation moving or not, is there dynamics or not. We listened to mayors and I would name good examples: Zhytomyr, Khmelnytskyi. They know how to take loans and repay them, they know how to mobilize their own funds. But local budgets also have money taken out to the state budget. It is not easy for them locally,” says Olena Pavlenko.
Since 1 April 2026 year the municipal enterprise Cherkasyteplokomunenerho stopped operating its cogeneration units and p
The expert adds: a special financial instrument was developed to support resilience plans. For example, if a community wants to purchase equipment for winter, it must allocate 20% of the cost from its own budget. The state was supposed to cover the rest.
“As of March, when we heard about this instrument, it sounded great and was more or less clear. As of August I see that fund-raising — the pace and dynamics — are low. Whether that is because the state gives less, or because many documents are required, or funds are given post-factum — it’s unclear,” says Olena Pavlenko.
At the same time the government believes Ukraine has prepared for winter much better than last year. Prime Minister Serhiy Koretskyi says: in 2026 year the country has more generation capacity, and a significant portion of critical infrastructure objects have been provided with backup power sources. The head of government also speaks of a stockpile of equipment in case of new destructions.
Prime Minister of Ukraine Serhiy Koretskyi during a Cabinet meeting.
“The resilience plan was overambitious from the very beginning. And you should think that way and set the task that way. Because if you set a smaller task you would probably find reasons why we didn’t complete them. And when you set above the maximum, then even 70–80% completion is significantly more than one could imagine,” the prime minister believes.
Ukraine has already managed to accumulate enough gas for winter, but injections into storage are still ongoing. Planned maintenance on nuclear power plants is nearing completion. However, it is impossible to assess the overall level of winter preparedness — most data are classified.
The main risk for next winter remains unchanged — the Russians will try to destroy Ukraine’s energy sector. Based on intelligence data, the Kremlin is again betting on terror against civilians. Therefore the question is not only whether Ukraine managed to prepare its energy sector well for winter, but also whether the state’s air defense can be strengthened.
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