This week, Europe’s pro-war politicians demonstrated unity: the sanctions against Russia will remain in place, and Ukraine must be strengthened militarily — even without the United States, if necessary. "Only a strong Ukrainian army can guarantee peace," emphasized Emmanuel Macron in his usual pompous style. The "coalition of the willing" around France and the United Kingdom is even planning to deploy peacekeeping forces on Ukrainian soil, but the question of financing is still unresolved – the international V4Na news agency highlights.
According to British diplomat Ian Proud, it's unclear how the Ukrainian state budget will be financed next year. He thinks the Europeans' behaviour is particularly "worrying — not least because the summit seemed to be designed to prolong the war, rather than end it."
In his analysis for the American foreign policy outlet Responsible Statecraft, Proud warned that Ukrane could go bankrupt by 2026, even if the war ends tomorrow. Because currently, there is no plan for how Ukraine's budget will be financed after 2025,
the European elites fail to understand the political costs, regardless of how much longer the war continues," he said.
Macron Would Fill the Ukrainian Gap, but There's Nothing to Fill it With
There's a gaping hole in Kyiv's finances that no amount of tax increases or Western donations will be able to fill." It is naive to believe that Kyiv can quickly reduce its military expenditures, as the size of the armed forces has tripled, and defence spending has increased tenfold since 2021.
The structural deficit is devouring the state: since 2022, Ukraine has run an average budget deficit of over 22 percent of GDP. In 2025, Ukraine’s budget shortfall is expected to reach 41.5 billion dollars, even with falling military expenditures. To finance defence spending, Kyiv has drastically increased taxes and tariffs. Taxes have increased by more than 100 percent since the beginning of the war, while income taxes have risen by over 200 percent. Last year, the cost of the defence effort accounted for 64 percent of Ukraine's total budget expenditure.
According to the International Monetary Fund, Ukraine will remain cut off from capital markets until at least the end of 2026 – making it entirely dependent on Western aid. Without donations, neither the salaries of state officials, nor electricity bills can be paid. Initially, the US and the EU jointly provided more than 100 billion dollars in direct financial support. However, since 2024, there has been a shift towards loans, and willingness to provide unconditional aid is declining. The G7's 20 billion dollar special loan will sustain this year’s budget—provided through the World Bank by the US, but only for specific projects such as energy infrastructure. But for 2026, there is no plan. The risk of collapse is imminent, even with an immediate end to the war.
Cover photo: Emmanuel Macron and pro-war European leaders are intent on prolonging the war, collectively (Photo: ROBIN VAN LONKHUIJSEN)
