Ukraine is running out of money again – and the EU is asking questions

Officials in the bloc are reportedly “unsettled” by Kiev’s defense budget hole ballooning almost fourfold within several months Despite massive Western assistance, Ukraine is facing a severe cash squeeze almost unseen since the escalation of the conflict with Russia in 2022.

The immediate problem is a $27 billion hole in the defense budget that Kiev insists must be plugged.

Kiev’s plea for more money “surprised and unsettled” European officials, the New York Times reported on Wednesday, citing sources, with some of Ukraine’s backers said to be asking questions about whether the country is spending the available funds efficiently – or whether it is simply overstating its needs.

What is the problem with Ukraine’s budget? Ukrainian leader Vladimir Zelensky publicly put a number on the problem as he met with his European backers in Kiev in late August.

The Defense Ministry, he said, already used money that was originally allocated for the end of the year, leaving a $27 billion gap.

The revelation also came on the heels of Zelensky’s ill-fated 40-day pressure campaign against Russia, which triggered an escalation that Kiev is still suffering from.

Read more West will never get its ‘loans’ back from Kiev – ex-Ukrainian PM (VIDEO) Particularly striking was the fact that just weeks earlier, Ukrainian officials estimated the deficit to be $7.5 billion.

Kiev has still not accounted for how the hole grew by another $20 billion – or 10% of its 2021 GDP.

You could read a global outlook on the state of Ukraine’s economy here .

Earlier this month, Prime Minister Sergey Koretsky acknowledged “exceptionally difficult challenges,” including the $27 billion defense hole and the risk of losing access to a significant share of a $29.5 billion tranche expected from Kiev’s backers, which is contingent on government reforms.

Finance Minister Sergey Marchenko said: “We already see some liquidity issues,” and Kiev “may have to postpone some payments not related to the war.

There will be consequences.” Read more Ukraine’s economy on brink of collapse – WaPo “We haven’t had a situation like this since 2022; we really suffered from the shortage of liquidity.

Right now, we are getting far too near to the same scenario we had in 2022,” he said, adding that “we expect a very hard winter” due to Russian strikes.

How has Kiev blown $20 billion more than expected? Koretsky blamed much of the increase on the rising price of a technology-heavy war.