The European Union has rejected Ukraine's request for an advance allocation of additional funding in 2026 and has tied access to new funds to the implementation of specific reforms, the “Financial Times“ reports, citing a letter from European Commissioners Valdis Dombrovskis and Marta Kos to the Speaker of the Verkhovna Rada, Ruslan Stefanchuk.
Among the conditions are the abolition of VAT exemption for small international shipments and the introduction of rules for taxation of digital platforms. The two bills have already been adopted by the Ukrainian parliament, but they include a controversial amendment that relaxes the requirements for financial monitoring of politically exposed persons.
The strengthening of these rules is among the anti-corruption conditions set by Brussels. It is the amendment for politically exposed persons that is cited as a cause for concern in the letter by Dombrovskis and Kos.
Kiev requests advance funding
In the summer, Ukraine estimated its additional defense needs for 2026 at $27 billion. Kiev asked the European Commission to advance part of the funds under a €90 billion loan agreed to cover the bulk of the country's financial needs in 2026 and 2027.
The scheme provides for €45 billion for each of the two years, with the allocation of funds linked to the implementation of certain reforms. So far, 15.7 billion euros have been provided in 2026, RBC reports. If Brussels' requirements are met, access to additional support could reach about 34 billion euros this year.
On October 2, the European Commission announced the transfer of 2.9 billion euros to Ukraine under the Ukraine Facility mechanism. The Commission said the funds were intended to maintain financial stability and the functioning of the state administration, as well as to support reforms.
“European solidarity means concrete support“, said European Commission President Ursula von der Leyen.What Kiev and Moscow said
In a joint statement on October 1, Ukraine and the European Commission said they had identified ways to cover the country's budgetary and defense needs in 2026 and confirmed the steps necessary for the timely disbursement of the funds.
In an interview with the “Financial Times“, Ukrainian President Volodymyr Zelensky denied that there had been tension in his talks with Ursula von der Leyen. "We had a very good meeting with Ursula and her team, and she understands that they need to help Ukraine," Zelensky said. He added that due to the conditions of the war, reforms cannot always be implemented according to the preliminary schedule.
Kremlin spokesman Dmitry Peskov said that European military aid will not change the situation on the front. According to him, European countries are demonstrating a "militaristic attitude" and continue to direct funds to arms supplies.
Sources: RBC, Financial Times, Interfax-Ukraine