Ukraine’s $27 billion budget shortfall puzzles Brussels — report

The $27 billion figure was first mentioned last month, when scores of European officials arrived in Kyiv to mark Ukraine’s Independence Day on Aug. 24.

“In private, some have questioned whether money is being spent efficiently, two European officials said, or whether needs are being overstated,” the report said.

European officials are now seeking to determine how the shortfall arose, its exact size, and whether additional funds should be provided in 2026, and, if so, how. Kyiv has also approached the UK, Canada, and Japan for help covering the gap, according to The New York Times.

“The surprise request threatens to complicate Ukraine’s relationship with allies at a moment it needs their support,” the article adds.

“The United States has stepped back from backing Kyiv financially, making European money more essential. But national leaders must balance their support for Ukraine with domestic spending priorities, or risk angering voters.”

The Ukrainian budget shortfall also serves as a “stark reminder” that the cost of supporting Ukraine is rising, NYT noted.

“The nation faces relentless attacks from Russia, including strikes on ports that have deprived it of a major source of revenue,” the report said.

“It is also critically low on U.S.-made interceptor missiles capable of shooting down ballistics, and is trying to scale up development of its own alternatives.”

In April, the European Union approved a EUR90 billion ($105 billion) loan for Ukraine after a contentious political process. The assistance is to be distributed over two years: half in 2026 and the remainder in 2027.

“Paying it out faster may be the only workable option for getting Ukraine more cash quickly, eight European diplomats and officials agreed,” NYT said.

“Some European officials have suggested that momentum is building behind such a plan.”

Ukraine is also urging the EU to confiscate roughly $200 billion worth of frozen Russian assets, currently held in the Belgian clearing house Eurocelar. The last time the move was debated, last-minute opposition from Belgium forced Europe to settle on a joint loan instead.

“Belgium remains skittish, worried that seizing a foreign nation’s assets could trigger a financial crisis by sending a signal that foreign cash can be seized for political reasons, causing those savers to pull their money out of Euroclear and other European financial institutions,” the newspaper said.

“Given such barriers, any agreement to use the frozen money would take months, if one is possible at all.”