EU will not provide Ukraine with additional funds until promised reforms are implemented – FT

What Happened

The European Commission rejected Ukraine's request for early disbursement of funds from the €90 billion Ukraine Support Loan programme, according to Financial Times. Ukraine had sought early release of 2027 allocations to cover a US$27 billion additional defence need estimated by President Volodymyr Zelenskyy in summer 2025, and the government asked the European Commission to release funds early. Under the programme, Ukraine can receive up to €45 billion annually for 2026-2027, but has received only €15.7 billion this year due to delays in implementing reforms. The EU is instead insisting that Ukraine fulfil commitments that would unlock around €34 billion before the end of this year, including scrapping the exemption for small international parcels and introducing new tax rules for digital platforms. The European Commission also warned Ukraine not to backtrack on previously implemented commitments, citing the easing of requirements concerning politically exposed persons (PEPs). European Commissioners Valdis Dombrovskis and Marta Kos said in a letter to Verkhovna Rada Chairman Ruslan Stefanchuk that additional assistance for 2026 remains available if reforms are implemented.

Key Actors

Why It Matters

The EU's refusal to advance funds underscores the conditionality attached to financial support for Ukraine as it seeks to cover a US$27 billion defence shortfall amid the ongoing Russian invasion. The €90 billion Ukraine Support Loan programme is a key component of Ukraine's budget and defence financing for 2026-2027; delays in reform implementation have already reduced disbursements to €15.7 billion this year. The EU's insistence on scrapping the small-parcel exemption, introducing digital platform taxes, and not weakening PEP rules shows that Brussels is using financial leverage to maintain reform momentum even under wartime conditions, with implications for Ukraine's European integration and fiscal stability.

Watch For

Whether the Verkhovna Rada passes the outstanding reforms before the end of 2025 to unlock the €34 billion available this year; any Ukrainian moves to ease PEP requirements that could trigger EU objections; announcements following the 1 October European Commission-Ukraine agreement on covering 2026 budget and defence needs; the next Ukraine Donor Platform meetings and any further letters between European Commissioners and Ukrainian officials on reform benchmarks.