EU tells Zelenskyy to strengthen rule of law in Ukraine before any more monetary aid comes

European Union officials have told Ukraine they need to see progress on new legislation to curb the shadow economy, bolster tax revenue and move closer to EU law before they’ll dispense more funding.

EU Commission President Ursula von der Leyen had a tense meeting with Ukraine’s Volodymyr Zelenskyy at the United Nations in New York Tuesday, according to a person briefed on the discussions.

The Ukrainians voiced concern about the prospects of Russian escalation over the winter with limited air defences to shield their cities, the person said. They were outraged at the EU agreeing to remove sanctions on two Russian oligarchs as part of a deal to extend sanctions.

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“More defence support is coming. And as reforms in the Rada progress, more budget support too,” von der Leyen said in a post on X following the meeting, referring to Ukraine’s parliament. “We have €37 billion (euros) still available in this calendar year.”

After more than four years of all-out war, tensions are starting to emerge between Kyiv and key supporters as they confront the prospect of another brutal winter under Russian attack. Ukraine is growing frustrated with the reluctance of some European allies to supply crucial interceptors that Kyiv can deploy against Russian missiles, while the Europeans are grating at increased demands for financing.

Ukraine has asked allies to help plug an unforeseen budgetary hole of about US$30 billion and asked the EU to speed up the disbursement of a US$104 billion loan. That aid money was intended to see Ukraine through to the end of next year.

The EU has been pushing back against some of the Ukrainian figures and suggested that other partners — including Canada, Norway and Japan — should provide any additional funding. Zelenskyy told reporters that their teams would meet again in seven to 10 days for further talks on the issue and he is hopeful a solution will be found.