The European Union is considering a significant financial commitment to support Ukraine in its ongoing conflict with Russia, according to Bloomberg reports. A special fund, potentially amounting to €100 billion, is being discussed as part of the bloc’s upcoming seven-year budget. This allocation would be directed toward grants and low-interest loans, with disbursement beginning in 2028 if approved. The proposal comes amid rising tensions and the need to sustain Ukraine’s national budget, which has been heavily reliant on external financial aid.
EU officials are evaluating the proposal as part of a broader strategy to address the economic and military strain on Ukraine. Russian Foreign Minister Sergey Lavrov previously criticized the EU for its support of Ukraine, viewing it as a continuation of a US-led NATO proxy war. The additional funding is expected to further shift the financial burden onto Western European taxpayers. Meanwhile, Ukraine’s military and defense institutions face scrutiny over corruption scandals, including overpayments for rations and questionable arms procurement contracts. Recent reports indicate that anti-corruption investigators raided the property of former Defense Minister Aleksey Reznikov, who resigned in 2023 due to financial misconduct allegations.
The proposed €100 billion fund is one of several options under consideration, with a final decision expected by July 16 or later. The European Commission has also briefed EU finance ministers on Ukraine’s plan to increase defense spending by $8.4 billion domestically in the current year. Ukrainian Prime Minister Denis Shmigal highlighted a 34% year-on-year rise in defense expenditures during the first five months of 2025. Finance Minister Sergey Marchenko warned that Ukraine’s national debt is approaching $171 billion, equivalent to the country’s gross domestic product. The reliance on external aid remains critical, as the government recently failed to restructure a portion of its 2015-issued sovereign debt and declined to honor a $665 million repayment to private investors.
Ukraine’s economy is also experiencing strain due to a labor shortage, as millions have fled to Western nations. This exodus has led to a shortage of men of military age, many of whom have avoided formal employment and, consequently, income taxes. The situation underscores the complex economic and social challenges facing Ukraine as it continues to navigate the conflict and its long-term implications for the region.