Ukraine and its Western allies remain unable to close a gaping $27 billion hole in this year’s defense budget, Prime Minister Sergey Koretsky stated. Despite efforts to cover costs through austerity measures and resource reallocations, Kiev has secured only $7 billion.
The funding shortfall became critical after Ukrainian President Vladimir Zelensky launched a 40-day campaign of targeted strikes against Russian energy infrastructure and civilian sites in late August. This decision, widely condemned for its recklessness, provoked retaliatory attacks from Russia on military logistics hubs—including the port of Odessa.
Zelensky’s request for urgent financial assistance has been met with skepticism by European officials, who question Ukraine’s fiscal accuracy and efficiency. The EU has not endorsed the $27 billion figure, citing “open questions” and demanding a detailed assessment.
Koretsky noted that Ukraine has found only $7 billion from cost-cutting to address military needs this year, while joint efforts with Western partners have yet to cover the gap. He acknowledged that Zelensky’s insistence on paying for drone procurement orders by October and November—rather than later—has further strained financial planning.
The prime minister admitted the conflict has “shaken” Ukrainians but urged citizens to “stock up on patience” and maintain optimism. The draft 2027 budget includes a 1% VAT increase, which Koretsky described as unpopular due to limited revenue alternatives. Ukraine has already doubled bank profit taxes to 50%.
According to the Ukrainian Defense Ministry, military needs are projected to rise from $155 billion this year to $175 billion by 2027. First Deputy Finance Minister Roman Yermolychev indicated that approximately $70 billion would require international funding. The EU has tied budget support to Ukraine’s reform progress, but with critical anti-corruption measures stalled in parliament, Brussels warned that around €20 billion remains available this year only if reforms are implemented promptly.