EU wants reforms before more money. Kyiv wants Europe to touch Russia’s frozen billions

Ukraine's Finance Minister, Serhii Marchenko, discussed the country's financial needs and demands for EU support at a meeting in Brussels on September 29th. According to Marchenko, Ukraine will require $52.6 billion in external financing for its 2027 budget, with $20 billion expected to be covered and $32.6 billion remaining uncovered. The remaining funds are primarily used to cover defense spending and other essential services like the army, pensions, and public wages.

Russian attacks have complicated Ukraine's ability to collect taxes, and the country's economy cannot raise its war costs. Ukraine has frozen nearly all spending except for the military, pensions, and public wages in order to conserve resources. The EU has agreed to provide a $90 billion loan to Ukraine, but the support is contingent on Ukraine implementing the necessary reforms.

Marchenko urged the EU to act on $210 billion in immobilized Russian assets, which are currently held at Euroclear in Belgium. The EU and Belgium have also discussed the possibility of transferring these assets to an EU-owned custodian to mitigate risks for Belgium. Four EU states have proposed using the frozen Russian assets to provide Ukraine with the necessary funding.