Ukraine faces a deep liquidity crisis which forced the freezing of 39 billion hryvnia of investment expenditure and the cessation of VAT refunds for entrepreneurs. The situation is aggravated by the persistent attitude of the European Commission, which refused to accelerate the payments from the debt funds for 2027, demanding deep structural reforms from Kiev.
The scale of budgetary problems was confirmed by Finance Minister Serhij Marchenko erstwhile he spoke before the Finance Committee of the ultimate Council. He pointed out that under conditions of limited liquidity, the government's absolute precedence remains the defence and safety sector, while another spheres of the State's activities are funded as a remains. Although social spending has been formally secured, the head of the ministry has straight signalled the hazard of impending delays in their implementation.
Ukraine moves spending to December
According to Marchenka, the value of the expenditure shifted for September is 39 billion hryvnia. The head of the budgetary committee of the ultimate Council of Roxola Pidlas reported that the Ministry of Finance had put aside by December part of the capital expenditure planned for the period from September to November. It is so a postponement of the deadline, not a final waiver.
The government has besides adopted a decision that allows the Treasury to limit the beginning of funds for non-priority spending since October if there is no money for all planned payments in the single taxation bill. The solution is to apply until the end of the year and restrictions may apply to both the state budget and local budgets.
The effects are seen in the construction industry. Autostrada's founder Maxim Skil wrote on September 17 on Facebook that the state had suspended financing of all capital expenditure on a day-to-day basis, making the company retains work on all construction sites. According to Interfax-Ukraine's October 5 report, however, the company continues its work, despite the state's debt to it being about 15 billion hryvnia. According to Ukrainian media, Kiev counted in 2026 for $50.8 billion abroad funding, and by mid-September it received about 21 billion due to the fact that it was delayed to meet the conditions of assistance.
VAT returns in Ukraine: data falls, business alarms
Business representatives, including MHP, and Ukrainian politician Wadam Denysenko, claim that VAT refunds for exporters have been discontinued since 5 September. Denysenko speaks of an unofficial decision made by the government in terms of savings. Preliminary data from the Ministry of Finance show that in September 9.9 billion hryvnia VAT was reimbursed against 14.6 billion in August. Economist of the Bohdan Słucki economical strategy Centre pointed out that it was about half of the monthly average of January-August, which was 20.1 billion hryvnia.
However, the image is ambiguous: in the period January-September VAT returns amounted to a full of 170.9 billion hryvnia compared to 131.2 billion a year earlier. The head of the financial committee of the ultimate Council, Danyl Hetmancow, said that at best withdrawals could start again in 2 to 3 weeks, provided Parliament passed laws resulting from integration commitments to the EU, linked to EUR 4 billion.
Defence Needs of Ukraine: $155 billion in 2026
The Ministry of Defence estimates the financial needs for the war in 2026 at US$ 155 billion. In the fall of 2025, then defence Minister Denys Szmyhal spoke of at least $120 billion for this year. In the summertime of 2026, president Volodymyr Zelenski estimated additional defence needs at $27 billion.
According to the first Deputy Finance Minister Roman Jermolychev, about 7 billion of this amount are wages and benefits for soldiers, and about 20 billion are arms. Marchenko announced that Ukraine would cover more than 7 billion from its own resources, and another 12 billion from its partners.
For 2027, defence needs are expected to emergence to $175 billion, of which the draft budget predicts about 100 billion," says Interfax-Ukraine. Zelenski commissioned the government and diplomats to safe the financing of current defence needs by 15 October.
The EU refuses to accelerate the debt to Ukraine. Condition: Reforms
The EU debt for Ukraine (Ukraine Support Loan), agreed at the end of 2025, amounts to EUR 90 billion for the period 2026-2027, with a ceiling of up to EUR 45 billion per year. In 2026 Ukraine received EUR 15.7 billion so far. The reason is the delays in implementing the reforms required by Brussels.
As reported Financial TimesThe European Commission has rejected Kiev's request for early payment of appropriations for 2027. Commissioners Valdis Dombrovskis and Marta Kos wrote in a letter to the president of the ultimate Council, Ruslan Stefanczuk, that additional assistance remains available in 2026, but subject to the implementation of reforms. According to the Commission, Ukraine has access to another EUR 34 billion by the end of the year, whose payment depends on compliance.
Among the measures deemed crucial for global financing are 7 draft laws adopted by the ultimate Council at first reading in September. These include taxation of tiny global shipments, bankruptcy of tiny companies, Deposit warrant Fund, energy marketplace regulator and municipal services, compliance with EU standards, securitisations and covered bonds. Marchenko hopes that Parliament will support them in second reading.
On 1 October, the Commission and Kiev made a joint statementthat they had found funds to cover Ukraine's budgetary and defence needs in 2026, but did not mention the amounts or sources. The parties besides agreed to allocate EUR 45 billion smoothly for 2027, on agreed terms and monthly meetings.
We wrote about Poles' sentiments towards Ukraine's fast EU membership in the text: record opposition of Poles against fast accession of Ukraine to the EU.
Risk of hryvnia devaluation
Marchenko wrote that the pace of improvement implementation will straight affect the amount of backing Ukraine will be able to get by the end of 2026. He previously warned that if Parliament did not support the essential laws again, the Ministry of Finance does not exclude central bank budget financing, which could mean devaluation of hryvna and inflation. The European Commission besides assesses Ukraine's needs for 2027, with results to scope EU leaders in mid-October.
The deadline for the transfer of capital expenditure is December, but the ministry reserves that the remaining expenditure will be financed as the appropriations are affected. It is not known erstwhile VAT returns will return to the erstwhile level. Kiev besides did not uncover from which sources it will cover all gaps in defence spending.
Frequently asked questions
Why did Ukraine halt investment spending?
Due to a deficiency of liquidity in a single taxation account. abroad backing is slower than expected by the budget and part of the aid depends on reforms which the ultimate Council has not yet passed. The government first pays for defence and security, and capital expenditure planned for September shifted to December.
How much did Ukraine receive from the European Union in 2026?
By early October, Ukraine had received EUR 15.7 billion from the pool to EUR 45 billion provided for in the EU debt for 2026. The remainder depends on the implementation of reforms.
Will the EU pay Ukraine's money early?
Nope. The European Commission has rejected the request for early payment of the appropriations foreseen for 2027. By the end of 2026, any EUR 34 billion is inactive available, but provided that Kiev meets the established requirements.
How much does Ukraine request to defend in 2026?
According to the Ministry of Defence of Ukraine, the war needs in 2026 are $15 billion, including any $27 billion in additional needs for which no sources of backing have been identified.
Did Ukraine suspend the payment of pensions and salaries?
Nope. Marchenko reported that social expenditure is not limited for the time being, although he did not regulation out delays if there was not adequate money in the single taxation bill. Prime Minister Serhij Koreckyj assured that restrictions on another expenses should not affect pensions and salaries.
