Europe surprised by Ukraine’s massive budget deficit, questions efficiency of spending

European officials did not expect such a significant deficit in Ukraine’s defense budget, and Kyiv’s request for approximately €23.2 billion by the end of the year came as a surprise to them.

This is reported by The New York Times.

According to the publication, the EU is now trying to determine where the enormous budget gap came from and whether Ukraine truly needs the entire amount requested. In private conversations, a number of European officials are questioning how efficiently Ukraine is spending the money and whether it is overstating its financial needs. Brussels is also unclear about who bears responsibility for the sharp growth in the deficit.

Volodymyr Zelensky stated that under the previous leadership of the Ministry of Defense, funds earmarked for the end of the year were spent in advance. Former Defense Minister Mykhailo Fedorov denies this, claiming that a deficit of such magnitude did not exist under his tenure.

The chair of the Verkhovna Rada’s budget committee, Roksolana Pidlasa, said she had been warned at the beginning of the year about an expected deficit of around €6.5 billion. However, military spending in the first eight months of the current year grew by more than 17% compared to the previous year. According to Pidlasa, due to intensified Russian attacks on Ukrainian industry — including metallurgical plants and the export grain corridor — Ukraine lost approximately half of its expected revenues in just the past month.

In the spring, the European Union agreed on a €90 billion loan for Ukraine, designed to cover two years. Kyiv is now proposing to accelerate its disbursement, though this would leave fewer funds for 2027. Earlier this month, Brussels already stated that the EU would not speed up payments on this loan, despite Zelensky’s requests.

As the NYT notes, the unexpected request could complicate Kyiv’s relations with its allies at the very moment when Ukraine is becoming increasingly dependent on European financing due to reduced support from the United States.